Comments on Regulations on Pre-Existing Condition Insurance Plans
Posted Aug 10 2010 9:19am
August 10, 2010
VIA RULEMAKING PORTAL
Centers for Medicare & Medicaid Services Department of Health and Human Services Room 445-G Hubert H. Humphrey Building 200 Independence Avenue, SW Washington, CT 20201
Dear Sir/Madam Thank you for this opportunity to comment on the interim final rules pertaining to the Pre-Existing Condition Insurance Plan (PCIP) Program. Advocacy for Patients with Chronic Illness, Inc. is a 501(c)(3) nonprofit that provides free information, advice and advocacy services to patients nationwide in areas including health insurance. Of particular relevance here, we receive hundreds of requests for assistance every year from people who are uninsured and cannot find health insurance due to a pre-existing condition. It is from this unique perspective that we submit the following comments.
We are very gratified by the creation of the PCIP program as a temporary measure to accommodate consumers with pre-existing conditions until pre-existing condition exclusions are eliminated in 2014. In some States, high risk pools have been an important option for consumers. However, existing State high risk pools have several defects which the PCIP program should avoid
• First, they are too expensive for most people.
• Second, they often cover people with a narrow range of listed conditions.
• Third, they have pre-existing condition waiting periods as long as twelve (12) months.
• Fourth, they have annual and lifetime caps that greatly limit the value of this insurance of last resort.
• Fifth, they cap enrollment so as to fail to fulfill the promise of providing a real option for people with pre-existing conditions.
Although the PCIP program avoids some of these pitfalls, it does not avoid them all. Below we offer specific suggestions to amend the regulations to address these hazards.
Although the interim final rules set forth four alternative means by which a consumer may establish that he/she has a pre-existing condition, the federal PCIP program will only allow proof of a pre-existing condition based on written proof that the consumer was denied coverage under another insurer due to the consumer’s health, or only with an exclusory rider. 75 Fed. Reg. 45017. This is so even though the Agency “note[s] that in some cases, individuals with pre-existing conditions are unable to obtain outright written coverage denials, but instead are told that carriers will not accept their applications.” Id. This is quite unfair. If insurers will not accept an application from a person with a pre-existing condition, which many do, then it may be impossible for the consumer to obtain the proof that you require. We already have heard of consumers facing this obstacle. Thus, we would urge the Department to consider allowing consumers to prove that they have a pre-existing condition by other means, such as a medical certification from a treating physician establishing that the consumer has a pre-existing condition, or an attestation from the consumer stating that they were denied coverage due to their pre-existing condition.
Second, the PCIP program is permitting states to condition eligibility on evidence that a consumer has a medical or health condition specified by the State. 45 C.F.R. § 152.14(c)(3). These State lists often are old, they do not even attempt to include the full array of rare diseases, they exclude many pre-existing conditions that prevent the purchase of commercial health insurance, and, thus, they bear no rational relation to the purposes of the PCIP program, or the State high risk pool, for that matter. They differ in different States, so there is no uniformity of consistency.
If the Department is going to take the position that the PCIP program is a federal program regardless of whether it is administered by a State, and that uniformity is a desirable goal as embodied in the interim final rules on appeals, then there should be federal standards for eligibility. At the very least, a State using a list of approved illnesses should be required to submit that list to HHS for review, and there should be some mechanism for consumers to petition to have additional illnesses added to this list. However, again, we would suggest, as an alternative, that the submission of medical certification that the consumer has a pre-existing condition, regardless of whether the condition is on a State’s list, should be a sufficient basis on which to establish eligibility.
Congress intended that the PCIP program bridge the gap between the passage of the Act and January 1, 2014, when pre-existing condition exclusions are eliminated for all Americans. Congress used the best estimate it had for the cost of the plan. For the Department to allow States to “manage enrollment over the course of the program” even before there is any evidence that the funds allocated to the PCIP program are insufficient deals a blow to Congressional intent. The Department is suggesting mechanisms like enrollment caps, phrased in or delayed enrollment, and “other measures.” 45 C.F.R. § 152.15. This appears to grant PCIPs permission to utilize these measures to “manage enrollment” without first requiring that the PCIP’s funds are insufficient to cover benefits for the consumers enrolled in the PCIP, seemingly without restraint or limitation, although 45 C.F.R. § 152.35 does require a showing of insufficiency of funds before a PCIP can make “adjustments.” We strongly object to this wholesale grant of power to limit the reach of a PCIP to the PCIPs (i.e., to the States) without even the preliminary showing of insufficiency of funds set forth in 45 C.F.R. §152.35. We urge the Department to clarify the rules to require a showing of insufficiency of funds before a PCIP is allowed to impose caps on benefits or enrollment, or other measures designed to control costs.
We very much support the prohibitions on pre-existing condition exclusions and waiting periods set forth in 45 C.F.R. § 152.20, as well as the premium and costsharing principles set forth in 45 C.F.R. § 152.21. However, because the out-of pocket limits set forth in the rules apply only to in-network benefits, 75 Fed. Reg. 45019, States are setting exorbitant out-of-pocket limits for out-of-network benefits without regard to the adequacy of the PCIP’s network. For example, Connecticut’s out-of-pocket maximum for out-of-network benefits is $15,000 for an individual and $30,000 for a family. However, Connecticut’s PCIP is piggy-backing on the State’s Charter Oak Plan, which has had such an inadequate network that consumers have demanded that their premiums be returned, albeit to no avail.
In addition, the lists of covered benefits and excluded benefits set forth in § 152.19 beg more questions than they resolve.
• May a PCIP utilize annual caps on benefits? Lifetime caps? It is our understanding that the State of Connecticut, for example, believes it has approval for a $1.5 million lifetime cap on PCIP benefits. Is this so? We strongly urge the Department to restrict the use of lifetime and annual caps on benefits.
• May a PCIP place an annual cap on particular benefits; for example, may it limit pharmacy benefits to $7,500.00 per year, or physical therapy to twenty (20) visits per year? For example, Connecticut’s PCIP has a $2,000.00 annual cap on outpatient mental health benefits – something that violates the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 and the implementing regulations even if it does not violate the Affordable Care Act and the interim final rules. Is this acceptable to the Department? Again, we strongly urge the Department to limit caps on particular benefits, and to clarify that the MHPAEA applies to the PCIPs.
• Who decides whether a service is medically necessary? Experimental or investigational? Based on what standards? At the very least, there should be a cross-reference to the interim final rules governing appeals, the NAIC Model Act, or both.
• What prescription drugs are covered for what uses? Although the rules permit PCIPs to have networks, may they also use formularies or preferred drug lists? May they utilize tiers, which place the cost of the newest and most expensive prescription drugs beyond the reach of many consumers? The federal PCIP charges $300 per month for nonformulary brand name specialty medications. Which medications are considered specialty medications? At the very least, consumers should be aware of these limits before they enroll in a PCIP.
Although the exclusion of abortion services – even if such services are paid for entirely by private premium dollars, but through a PCIP – has received the most attention, these and many other questions remain, and these are tremendously important questions to consumers. We have had significant experience with State high risk pools. Many of them leave much to be desired in many respects. We would like to see greater Departmental supervision in the area of benefit design. There is a lot of middle ground between giving the States free reign and needlessly tying their hands. In our view, the balance that has been struck by the rules as they read currently leaves far too much discretion to the PCIPs (and, thus, the States). The only way the Department can ensure that federal dollars are being spent consistently with federal intent is to exercise more control over, and provide more guidance to, the PCIPs.
Finally, we strongly urge the Department to clarify the prescription drug benefit in the federal PCIP. People with pre-existing conditions – many of which have multiple chronic conditions – cannot afford these copays and coinsurances unless they are applied against the annual out-of-pocket limit. However, the description of benefits posted on http://www.healthcare.gov does not state whether the high prescription drug costs are applied against that limit. If they are not, they must be; patients with multiple sclerosis, Crohn’s disease, rheumatoid arthritis, psoriatic arthritis, many forms of cancer, and other illnesses for which specialty drugs routinely are prescribed cannot afford the PCIP’s copays and coinsurances if they are not included in the out-of-pocket maximum, so that once they reach that maximum, drug coverage is at 100%.
Finally, we are concerned that the appeal provisions, as well, are not sufficiently detailed to constrain the PCIPs from infringing on consumers’ rights. While we very much appreciate the intent to have at least one level of appeal and at least one independent review, we strongly urge the Department to be a little more specific. In particular, we are very concerned that “an entity independent of the PCIP” may be construed to include a State agency, so that one State agency could be operating the PCIP, while another would be deciding reconsiderations of a redetermination. 45 C.F.R. § 152.26. This is not, in our view, true independence. Reconsiderations of redeterminations should be presided over by truly independent reviewers, i.e., not state agencies or employees. It is critical that the rules clarify the meaning and scope of independence.
We are very pleased that, now, when we receive telephone calls from consumers who have pre-existing conditions and can afford insurance – especially in States that have no high risk pool or guaranteed issue option – we have a resource for them. Our goal, through these comments, is to assist the Department to ensure that the PCIP program is as good a resource as it can be under all of the circumstances. We hope that the Department will elaborate on these rules so as to ensure that this goal is met.