Government to lower prices, ease rules on health plans for people with preexisting conditions

The Obama administration, expanding a program created by the new healthcare law, reduces premiums on preexisting condition insurance plans and loosens restrictions on who can sign up for them.

By Noam N. Levey, Washington BureauJune 1, 2011
WASHINGTON — The Obama administration, expanding a program created by the new healthcare law, moved Tuesday to make health insurance more affordable and accessible for Americans who have been denied coverage because they are sick.

Across the country, the federal government is reducing premiums on special coverage available to uninsured people with preexisting conditions such as cancer or diabetes.

And the administration is loosening restrictions on who can sign up for so-called preexisting condition insurance plans.

These plans were created by the health overhaul that President Obama signed last year. They are meant to provide temporary aid to sick Americans until 2014, when insurance companies will no longer be allowed deny coverage to people who are sick.

But the number of people signing up for these plans has lagged, in part because of high premiums and stringent eligibility guidelines.

Now, federal officials estimate, premiums in some states could come down as much as 40%, thanks to a more refined analysis of what the plans should charge.

The administration is directly slashing premiums in the District of Columbia and most of the 23 states that have elected to have the federal government run their health plans. The remaining 27 states, which each run their own plans, will be able to reduce premiums, as well.

At the same time, the administration will no longer require applicants for these plans to furnish a letter from an insurance company showing they had been denied coverage. Instead, applicants will need only a letter from a doctor, nurse or physician’s assistant stating they have a medical condition.

Applicants will still have to show they had been without coverage for at least six months.

The moves to step up efforts to get people into these plans drew praise from several patient groups, including the American Cancer Society’s Cancer Action Network and the American Heart Assn.

Dr. John H. Klippel, CEO of the Arthritis Foundation, said the recent changes “are critically important for all people with chronic diseases.”

The expansion of preexisting condition insurance plans is made possible by $5 billion that was set aside in the new law.

Because just 18,000 people nationwide had signed up for a plan, much of that has not been spent, according to the Department of Health and Human Services.

Richard Popper, who oversees the plans, said the department has not estimated how much the change in rules would end up costing. Nor would the department say how much of $5 billion remains.

Additional information about signing up for a preexisting condition insurance plan is available at or by calling (866) 717-5826.

Source:  LA Times

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