The Low-Cost Health Care Option You Never Heard Of

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THE DETAILS: The plans, which went into effect this past July, operate in all 50 states, but each state operates them a little differently. In 23 states, PCIPs are administered by the federal government, who contracted the job out to the Government Employees Health Association, which operates health insurance plans for all federal employees. The remaining 27 states and the District of Columbia chose to administer their plans themselves, and for that reason, costs, benefits, and eligibility requirements vary state to state (although the benefits are the same for all states being operated by the federal government). Nevertheless, all PCIP plans are required to adhere to a few basic rules:

You have to have a pre-existing condition, and must have been uninsured for at least six months, to be eligible. In most cases, you're required to provide written proof of being denied coverage and other documentation showing that you have a pre-existing condition.

As mentioned, the costs for the plans must be equivalent to the standard market rates for healthy individuals in the states in which they're operated, and the rates don't vary based on gender.

Annual out-of-pocket costs are capped at $5,950, though some states set lower limits.

The plans are limited to U.S. residents.

WHAT IT MEANS: If you've been living without insurance because no provider would cover a pre-existing condition, these plans are a great way to get coverage. "But they're not for everybody," says Hall. For instance, people with pre-existing conditions who've just been laid off work (where they had had employer-provided health insurance) and haven't been uninsured for six months wouldn't qualify. And though the plans make insurance cheaper, the cost of the plans can still be a barrier, says Rosen. Costs range from $240 per month for a $5,000 deductible plan in Utah to $1,006 per month for a $1,500 deductible plan in Alaska. Plans administered by the federal government all have a standard $2,500 deductible, but state premiums range from $330 to $556 per month. Those prices can push unemployed people out of the market, Rosen says.

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But Hall says that the costs could be coming down over the next few months. "Because enrollment hasn't been as rapid as expected, some states may try to bring prices down," she says. The way the funding was set up, if the states don't draw enough participants, they'll lose the money. Some states will even be expanding the types of plans being offered in 2011, developing one for complete medical care and another for individual medical services like medications. "Getting an insurance program up and running in 90 days was an incredible feat," she says. "Now that things have slowed down, they're figuring out what they can do to make these plans more user-friendly."

If you have a pre-existing condition and haven't been able to get coverage, here are a few things to know:

Find out whether you qualify. Check out PCIP.gov or PCIPlan.com to find out whether you qualify and what the premiums and deductibles are in your state. Hall recommends consulting an independent insurance broker (find one in your local yellow pages) who can help explain your state's plans and what you'll need to apply.

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