Health insurance for people with medical conditions gets more affordable Posted: August 30th, 2011

If you've gone without health insurance for at least six months and have a medical condition that makes it difficult to qualify for coverage, then you're eligible for the government's new Pre-Existing Insurance Plan created under health care reform.

Even better news? Premiums for the plan have dropped in many states and could drop in others.

The U.S. Department of Health and Human Services cut premiums for the plan in 17 states and the District of Columbia by up to 40 percent. The premium reductions, which became effective July 1, were in states where the federal government runs the plans.

Twenty-seven states operate their own plans with federal funds. So far, four of those states have cut rates, and additional states may follow suit.

Here are three things you should know about the PCIP:

1. Rates vary by state

PCIP premiums are set state by state to about the average of what healthy people would pay for individual health insurance in those markets. Health insurance rates in the private market vary widely by states, and so do PCIP premiums. Virginia has the lowest rates for the federally-run PCIP, and Massachusetts has the highest rates. It's difficult to compare rates among plans administered by states because those plans vary in how they're structured.

2. In many states, you choose from three types of plans.

The PCIP in every state provides broad medical insurance coverage. In the 23 states and District of Columbia where the PCIP is federally administered, you can choose from these plans:

• Standard plan with a $2,000 in-network deductible, $3,000 out-of-network deductible

• Extended option, $1,000 in-network deductible, $1,500 out-of-network deductible

• HSA plan includes the option to have a health savings account; deductibles are $2,500 for in-network providers and $3,000 for out-of-network providers.

All these federally run PCIP options fully cover preventive care. Copays for office visits are $25, and coinsurance is 20 percent for other services, such as lab work, hospitalization and outpatient surgery.

3. It's easier to enroll.

Before July 1, you had to show a denial letter from a health insurance company to enroll in the PCIP. Now you just need a doctor's note confirming you have a pre-existing condition. The requirement that you must be uninsured for six months still stands.

Officials are hoping the rate cuts and easing of enrollment rules will prompt more people to sign up. As of May 31, only 24,712 people had enrolled in the PCIP, despite the millions of Americans who are uninsured.

Chart:

PCIP monthly premium for a 50-year-old who purchases a standard plan where the PCIP is federally administered.

Alabama $251

Arizona $240

Delaware $250

District of Columbia $324

Florida $270

Georgia $338

Hawaii $267

Idaho $305

Indiana $284

Kentucky $226

Louisiana $296

Massachusetts $416

Minnesota $221

Mississippi $336

Nebraska $303

Nevada $260

North Dakota $305

South Carolina $319

Tennessee $305

Texas $306

Vermont $339

Virginia $214

West Virginia $273

Wyoming $290