Health Reform Law's Pre-Existing Condition Plan Kicks In

Many Americans, including baby boomers too young for Medicare and disabled adults of any age, have been unable to obtain private health coverage at any price because of a pre-existing health condition. As part of the roll-out of the new health reform law, the U.S. Department of Health and Human Services (HHS) has announced the establishment of a new Pre-existing Condition Insurance Plan that will offer coverage to these previously uninsurable individuals.

The Pre-Existing Condition Insurance Plan, which will be administered either by a state or by HHS, will provide a new health coverage option for Americans who have been uninsured for at least six months, have been unable to get health coverage because of a health condition, and are a U.S. citizen or are residing in the United States legally.

Created under the new health reform law, the Pre-Existing Condition Insurance Plan is a transitional program until 2014, when insurers will be banned from discriminating against adults with pre-existing conditions, and individuals and small businesses will have access to more affordable private insurance choices through new competitive insurance exchanges. (In 2014, Members of Congress will also purchase their insurance through these exchanges.)

"For too long, Americans with pre-existing conditions have been locked out of our health insurance market," said HHS Secretary Kathleen Sebelius. "[T]he Pre-Existing Condition Insurance Plan gives them a new option -- the same insurance coverage as a healthy individual if they've been uninsured for at least six months because of a medical condition."

The plan will offer "comprehensive coverage at a reasonable cost," according to Jay Angoff, director of HHS's Office of Consumer Information and Insurance Oversight. The average monthly premium for participants in the new program will vary by state and will range within states from $140 to $900, according to HHS.

Twenty-one states have elected to have HHS administer the plans, while 29 states and the District of Columbia have chosen to run their own programs. The national Pre-Existing Condition Insurance Plan will be open to applicants in the 21 states where HHS is operating the program starting July 1, 2010. All states that are operating their own Plans will begin enrollment by the end of the summer, if not before.