States Struggling To Provide Insurance to Those with Pre-Existing Conditions

Cecil Bykerk, the head of the board that runs Iowa’s health plan for the uninsured who can’t qualify for private coverage, finds himself in a dilemma that many states are trying to deal with it, that is the high cost of providing coverage. Iowa may just end up depleting the $35 million dollar fund that is to be used to cover people with  pre-existing conditions, through the federal PCIP insurance plan.

The money is supposed to last to 2014, when insurers will be required to cover everyone even if they’re sick, but could easily run out before then if too many people sign up.

To qualify for the PCIP program, people must have pre-existing medical conditions and have gone at 6 least months with no insurance. Once insured these recipients usually have a lot of pent-up demand for health care services in addition to ongoing needs for expensive care.

In Iowa the average monthly costs for those  enrolled  in the PCIP for less than six months is $4,800, compared to $1,800 for longer term enrollees, Bykerk says.

In Alaska the average monthly medical costs for someone who’s been enrolled in the PCIP for less than six months is $17,500, compared with $7,500 for people who’ve been enrolled for longer than that, says Bykerk, who also serves as executive director for Alaska and Montana’s PCIP.

Another issue adding costs is the practice of people signing up, receiving whatever health care services they need, and then dropping coverage. Bykerk cites the example of a woman who signed up for coverage, had knee surgery, then dropped the plan. The cost to taxpayers was $110,000.

The PCIP program, created under the 2010 health law, was allocated $5 billion to cover the nation until 2014. So far roughly 49,000 people have signed up, but due to the high costs of premiums at least nine states have requested and received additional funding.

In Iowa, state health officials want to use federal AIDS Drug Assistance Program funds to buy uninsured residents with HIV/AIDS coverage through the high-risk pool.

But Iowa is one of nine states that don’t permit third parties to pay health insurance premiums and the board won’t consider asking HHS to amend its contract to permit it.

Bykerk says that he’s been told by other states, that allow third-party payment, that drug costs for HIV patients can cost more than $20,000 annually and that’s not including other medical costs.

“The board is concerned about their fiduciary responsibility to the 300 people that are already in the program,” he says. “We don’t want to run out of money.”

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