Finding high-risk coverage while waiting for Obamacare

November 19, 2012

By Herbert A. Sample

Ah, health insurance. It can be aggravating when you have it, and it sure can be aggravating when you don’t. And the wizards behind the curtains at the U.S. Department of Health and Human Services, the state Managed Risk Medical Insurance Board and a private company whose motto is “Helping Government Serve the People” aren’t making it easier as the start date for “Obamacare” grows closer.

But first, some history: I wrote about my travails with the individual health insurance market in March, after Blue Shield of California, Kaiser Permanente and Aetna denied me coverage, citing relatively minor pre-existing conditions. A fourth, Anthem Blue Cross, said they’d love to cover me and my pre-existing conditions – for $1,350 a month. I declined the invite.

By the end of August, I had tried applying to one more insurer, Cigna, but they too said my pre-existing conditions were just too much. My COBRA coverage from my previous employment also was exhausted. So I resigned myself to having no health insurance coverage, if only for six months. That’s because I had my eye on the state’s Pre-existing Condition Insurance Plan, commonly known as PCIP.

PCIP was created in the Affordable Care Act (ACA) – known to supporters and critics alike as “Obamacare.” The U.S. Department of Health and Human Services has primary responsibility for the program but contracts with states to implement and manage it. California chose to pay a Virginia-based company, Maximus, to handle its administration.

The PCIP program is a high-risk insurance pool that offers coverage that, at almost $400 a month for someone in my age group and location, is much cheaper than California’s other high-risk pool, the Managed Risk Medical Insurance Plan (MRMIP.) And for people like me who can’t get coverage from private insurers, PCIP sounds like a great deal. That is, until Obamacare kicks in on January 1, 2014 and insurers are required to cover most everyone who applies, without regard to pre-existing conditions. (At that point, PCIP by law goes out of business.)

PCIP has a catch – namely, that applicants must first go without “creditable” health coverage for at least six months.

The definition of “creditable” is difficult to pin down. The term dates to earlier health insurance laws but was adopted both in the ACA and the rules HHS set down to implement it. Essentially, it’s the coverage a person had before obtaining a new policy, according to health policy experts. Thus, most health policies are considered creditable.

As for the six-month PCIP delay, health policy experts said that was added to the ACA because its drafters feared the programs otherwise would be overwhelmed with customers and would run out of federal dollars.

In any case, given a lack of options, I was willing to take a chance on having no insurance for a half-year. But in August, Encino-based health insurance broker Joel Wagner and I stumbled upon what seemed like a decent solution to my six-month waiting-for-PCIP problem: A catastrophic policy, offered by HCC Life Insurance Company, that is limited to six months and only covers hospitalization. In effect, if I caught a cold, I’d have to pay the full cost of seeing a doctor. But if a bus hit me, the policy would cover a good part of my hospital expenses.

Our next step was to determine if PCIP considered the HCC policy to be “creditable.” We separately called PCIP’s toll-free line, apparently staffed by Maximus employees, and provided the name of the policy and insurer. Just to be sure, I also sent an email with the same query to PCIP, which went to a Maximus email address. We got the same answer: the HCC policy was “not creditable.” That meant I could buy the short-term catastrophic policy without worrying that I would be disqualified for PCIP six months down the road. I was near ecstatic: I had found my own little insurance bridge to Obamacare.

Or so I thought. Wanting to write a story and tell the world about my discovery, I contacted the Managed Risk Medical Insurance Board (which oversees PCIP and MRMIP,) HHS and Maximus. Weeks after I sent their spokespersons a list of questions, a Maximus manager called to say that lo and behold, the HCC policy was indeed “creditable.” Alas, I had already coughed up $272 for the first month of the HCC policy.

I asked Maximus for an explanation. Spokesman Blake Travis refused to answer any questions, saying company policy bars discussion of health policy “determinations” or specific cases with the media – even if it’s my own case I want to discuss.

Jeanie Esajian at the state Managed Risk board repeatedly referred me to HHS, saying the feds set the rules for PCIP. The HHS spokesman, Fabian Levy, would not explain why catastrophic policies are categorized as “creditable” just like comprehensive policies. Nor would he say whether HHS ever considered deeming catastrophic policies as “not creditable” so people waiting for PCIP can in the meantime obtain coverage for worst-case medical issues.

Asked whether HHS had received complaints about Maximus giving customers wrong information about the “creditable” status of policies, Levy didn’t respond directly. He simply insisted that the vast majority of PCIP enrollees are “happy with their coverage.” I asked a similar question concerning complaints about Maximus that were filed with the Managed Risk board; Esajian only responded after I filed a state Public Records Act request; she said no complaints had been filed about Maximus.

Anthony Wright, who heads the consumer advocacy coalition Health Access California, said it’s possible that no one involved in the ACA’s drafting contemplated allowing people to buy a catastrophic policy while waiting for PCIP. There just were too many other burning issues to deal with, he suggested.

Still, it’s anyone’s guess how MRMIB and HHS justify their policies. The company won’t explain why its employees provided incorrect information. And because of Maximus’ mistake, I now have to wait seven months with no coverage – not six – before I can join PCIP. In the meantime, I hope to nimbly avoid wayward buses.

Herbert A. Sample is a freelance writer based in Los Angeles, CA. He can be reached at hasample@mac.com

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One Response to Finding high-risk coverage while waiting for Obamacare

  1. PeonInChief

    November 26, 2012 at 11:02 am

    It’s amazing that so few people know that individual insurance is almost impossible to get. I used to have long converations with my co-workers, explaining to them that COBRA was really their only option once they left us. By the time you’re 30, you’ve had something that make you uninsurable. I assume that you investigated Cal-COBRA, as it provides a longer period of post-employment coverage, if your former employer was subject to it.

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