An article in today’s LifeHealthPro prompted my blog post today. It’s about the Pre-existing Condition Insurance Plan (PCIP) that was established by the Affordable Care Act to guarantee health insurance for the unfortunate individuals who had health conditions so serious insurers wouldn’t write insurance on them.
Well, folks, the federally-run PCIP is running out of money to pay for the claims of all the sick people who purchased coverage through the plan. Why is that? you may wonder. Well, the government paid more in claims that it expected to pay. Here’s my question: Why did the government think insurance companies didn’t want to write coverage for those people? And here’s my answer: Because people with health issues have more claims than people without health issues do.
I’m not saying unhealthy people shouldn’t be able to have coverage. However, since the very nature of insurance–and state insurance regulations–REQUIRES premiums to be adequate enough to pull in enough funds to pay claims, there’s only one things premiums can do when the costs of claims rise. Yep, you guessed it. So when the PCIP provided “affordable” insurance, it wasn’t charging enough premiums to pay the claims. Which is really BAD news for the folks enrolled in the plan. Which those of us who understand the nature of insurance expected to happen. [P.S. The PCIP stopped accepting new enrollees some time ago because the government saw the handwriting on the wall.]
I’m a nonsmoker in my late 50s who has no health issues: my blood pressure is 120/80, my cholesterol is below 200, and I don’t take regular medication. I don’t have diabetes or any other condition. And I pay, personally, out of my own pocket (because I’m self-employed), $563 a month for health insurance. I understand precisely what consumers are faced with concerning the costs of healthcare.
I’m also one of the few people who has a copy of the text of the Affordable Care Act on her computer, and who has read a good portion of that text. (I admit it: I haven’t read the whole thing.) There are all kinds of provisions most consumers don’t know about. And I’ll bet a lot of politicians don’t know about them, either.
If you’re interested in reading a brief, consumer-friendly timeline of what will be happening under the Affordable Care Act, you can visit Healtcare.gov at What’s Changing and When. Although many people know more about the Affordable Care Act than I do, I’ve researched it extensively, written a couple of insurance courses on it, and presented a number of webinars on the topic. I welcome your questions.