Health care reform
Brokers can no longer collect $100 fees for referring individuals to health care reform’s high-risk pool. The referral fee program, which began in May 2011, was cancelled as of May 1, 2012, according to an announcement from Centers of Medicare and Medicaid Services (CMS).
The high-risk pool, formally called the Pre-Existing Condition Insurance Plan (PCIP), is still expected to remain in operation as a transitional program until the Exchanges open in 2014, although funding for the program is reported to be running out.1
A message to brokers explaining the end of the program is available on the PCIP portal. It notes:
“We are writing to thank you for the extraordinary efforts you have made in helping to increase awareness of and enrollment in the PCIP program… We have determined that our outreach efforts have succeeded in significantly raising awareness of PCIP and enrollment in this program.”2
The high-risk pool provides a new health coverage option for Americans who have been uninsured for at least six months and have been unable to get health coverage because of a pre-existing condition, such as cancer.
This temporary form of coverage, also called “bridge” coverage, won’t be needed once the Health Insurance Exchanges open in 2014. The Exchanges cannot deny anyone insurance or charge them a higher premium because they have a pre-existing health condition. The price of Exchange coverage is designed to be comparable to what healthy people would pay for coverage purchased through the conventional market.
Not all states chose to operate high risk pools, so enrollees in those states are in a PCIP operated by the federal government. Initial projections indicated that millions of uninsured Americans with health problems would enroll in the PCIP programs operated by the states or the federal government. Since early enrollment was much slower than expected, the broker referral fee was added in an effort to boost participation in the federally run high-risk pools.
Although enrollment is still low, expenses have been much higher than program creators anticipated. At the federal PCIP program, annual claims have averaged about $29,000 per enrollee, according to a report by the CMS, which is depleting funding for the program much more quickly than originally anticipated.3
Although brokers are still encouraged to continue “voluntary referral” of individuals to the high-risk pools, they will receive no compensation for doing so.
Impact on employees and individuals — Employees and individuals may not have access to a knowledgeable broker who could assist them in enrolling in the PCIP. If higher-than-expected claims may exhaust the fund for the program prematurely, it’s not certain how the program would be funded for additional individuals who may seek to enroll between now and 2014.
Impact on employers — Although there is no direct impact on employers, those who do not offer group health insurance should be aware that their most vulnerable workers who are eligible for the high-risk pools could be losing access to this key insurance for a period of time until 2014.
Impact on brokers — This change may limit the ability of brokers to serve the needs of individuals who need assistance enrolling in the high-risk pool program to obtain health insurance coverage.