Got Insurance? Calif. Program Helps Some Denied Due to Pre-existing Conditions

Dec. 16, 2011 / By

New America Media, News Report, Viji Sundaram, Posted: Dec 12, 2011
SAN FRANCISCO–In the one year Gabe Chavez was without health insurance after being diagnosed with type 2 diabetes, life, he said, “was horrible.”

“Nobody should be without insurance,” said Chavez, 39. “It’s too dangerous,” added the father of two, a resident of Alameda, across the bay from San Francisco.

Chavez’s doctors did the best they could to help him cope with the disease, but blood work and other important procedures fell by the wayside.

He lost his coverage three years ago when his old sales job at a spare parts store ended with the sale of the store, where he had received full health benefits through a company-sponsored group plan. Chavez’s new employer could only contribute $200 each month toward his health insurance.

Because his diabetes marked him as “high risk,” the cheapest insurer he could find quoted a monthly premium of $1,000 – far more than he could afford. So he ended up joining the ranks of California’s nearly 7 million uninsured.

Program Is Bridge to 2014

In August last year, though, Chavez got a break when California rolled out its Pre-Existing Condition Insurance Plan (PCIP). Chavez lost no time enrolling in the program.

PCIP is a part of President Obama’s healthcare plan that guarantees access to insurance for U.S. citizens with preexisting conditions, who have been uninsured for at least six months.

Knowing that the major changes under the Affordable Care Act (ACA) wouldn’t kick in until 2014, Congress made sure to include provisions that would take effect quickly, as a bridge to 2014.

PCIP is among those early deliverables. It is an interim measure Congress passed intended to protect at least some patients from being denied coverage up to Jan. 1, 2014, when a broader federal provision of ACA will begin prohibiting all insurance companies from discriminating against people with preexisting conditions.

The U.S. Department of Health and Human Services dedicated $5 billion to PCIP programs nationwide. California’s share for its program is $761 million. Some of the programs are run by the federal government, some by the states themselves.

Until recently PCIP had relatively stringent requirements for participation. One limit required participants show a denial from an insurance company. Now applicants need only show a letter from a doctor stating that they have had a medical condition in the past year.

The Congressional Budget Office originally estimated that 200,000 would sign up for the program by 2013. As of now, only about 38,000 have done so.

Low Enrollment in California’s PCIP

As in the rest of the nation, California’s PCIP has few takers. It’s not even clear how many Californians are eligible for the program. The California Endowment estimates the figure at 6.5 million, while other health care agencies say the numbers could be between 200,000 and 400,000.

Jeanie Esajian of the Managed Risk Medical Insurance Board (MRMIB), the state agency that administers the PCIP said the higher estimates don’t take into account limitations restricting who can qualify for the new program. To prevent people with private health insurance from switching to the far less costly PCIP, the state stipulates that patients must first be uninsured for at least six months before they can enroll in PCIP.

At 5,837, California has one of the highest enrollment rates in the nation, but it is well below the 11,250, the  maximum MRMIB can sign upits goal of signing up 11,250 by the end of the program, Esajian said.

She said that it is costing her agency an average of $3,100 a month to provide health insurance to an individual, which is three times the anticipated cost.

“Some of them have complex health issues,” she said, noting.

But California’s PCIP enrollees don’t reflect the state’s changing demographics. Of those currently enrolled, more than half of them are white. Of the rest, 8.4 percent is Asian and Pacific Islander, 7.8 percent Latino, 2.3 percent African American, 0.6 percent native American and the rest of unknown ethnicity.

Last August, MRMIB dropped premiums by 18 percent – its second drop this year — to entice more people to enroll. Annual out-of-pocket expenses are capped at $2,500, with a $1,500 medical deductible and a $500 brand name drug deductible.

Some health care advocates believe that even though premiums are at or below market value, they still price many Californians out of the market.

For many, “$200 a month is a significant percentage of their income,” asserted Anthony Wright, executive director of the non-profit health advocacy group, Health Access.

Ethnic-Community Outreach Inadequate

Others believe that MRMIB’s low enrollment figures, especially among minority communities, could be because its outreach into those communities has not been adequate. More than 70 percent of the state’s uninsured are people of color, with many of them having preexisting health conditions.

“The question has been raised at board meetings, and they are looking into more outreach into communities of color,” said Ellen Wu, executive director of the Oakland, Calif.-based nonprofit, California Pan-Ethnic Health Network. Wu also serves on MRMIB’s six-member board.

But Esjian maintained that her agency has been running a “robust” outreach program, campaigning and advertising in both English and Spanish. Early next year, it will begin translating the PCIP information on its website into Spanish, she said.

Asked why it has not campaigned in Asian languages, Esjian said: “The demographics of PCIP in California is overwhelmingly English speaking.

“If you look at our monthly enrollment reports to the board on our website, you can see that after Spanish, other languages spoken drop off to less than one percent, each.”

In any event, as Wright put it, “At the end of the day, for the 5,800 people who are in PCIP it is a life or death situation.”

Chavez would be the first to concur. “The benefit of having this is unbelievable,” he said.

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