PCIP to The Future!

The $5,000,000,000 set aside for Obamacare's high risk pools has dried up. I know this is a shocker to learn that a government program would run out of money, but never in a million years did they think that enrollment in this program would end up being what it is. (yes, that was sarcasm) So effective February 16th the federal government shut down their pool and states who were running their own pools shut down on March 3rd. Most IB readers knew this was coming. It was just a matter of when.

Here in the Buckeye State PCIP has been an ongoing battle. We've had a long standing feud between our Department of Insurance and HHS. Before funding dried up we had to deal with eligibility and rating issues. Last week, Ohio Insurance Commissioner Mary Taylor provided testimony to the Energy and Commerce Health Committee on PCIP and the trials they've had with HHS. Ohio set up their own High Risk Pool through Medical Mutual of Ohio. It was funded by HHS but ODI was supposed to retain general authority over the pool including consumer appeals, rates, and eligibility. Ms. Taylor was very blunt in her testimony when she said:

"The ACA mandated high risk pool programs were often times just a heavy handed and bureaucratic extension of the federal government. The poor management of the program led to their unsustainability and, ultimately, the untimely decision to close enrollment in the program earlier this year."

So, what were the "heavy handed" things HHS did?

Back in 2011 the insurer, MMO, submitted rates with a 3% increase for the $2500 deductible plan and a 17% increase for the $1500 deductible plan. ODI reviewed and justified the rate increases. HHS refused to approve the rates and directed MMO to artifically reduce the rate increase on the $1500 plan and inflate the rates of the $2500 plan. Doing this can cause solvency issues and encourages adverse selection.

The second issue followed shortly thereafter and ended up in a lawsuit. This revolved around enrollment of individuals into PCIP who had previously been in limited benefit plans. Obamacare states that Mini-Meds are NOT creditable insurance plans, but for PCIP enrollment HHS considered these plans creditable. Once again HHS overstepped into what was supposed to be a state regulators authority and forced MMO's hand to determine these people ineligible. Even worse they forced people already enrolled out of PCIP.

With federal regulators overstepping their bounds at every turn its no wonder why states are refusing to set up exchanges. In the end the feds want total control. Exchanges and subsidies will be dictated by HHS and rationing and price fixing will dominate health care.

This would be so comical if it weren't so real.