Section 1101 of the Patient Protection and Affordable Care Act of 2010 (Pub. L. No. 111-148) provides for a temporary high risk pool program in each state and the District of Columbia. The program, known as the Pre-existing Condition Insurance Plan (PCIP), is meant to act as a bridge to provide insurance coverage to eligible individuals until 2014 when the ban against discriminating against individuals with pre-existing conditions becomes effective and the health insurance exchanges are required to be in place.
Eligibility Requirements for High Risk Pools:
Five billion dollars ($5,000,000,000) in federal money has been allocated as funding for the high risk pool program to last through 2014.
Each state was given the option of either running its own high risk pool or allowing the federal Department of Health and Human Services to run a high risk pool in their state. (A list of each state's decision is available here.)
Arkansas chose to run its own federally funded high risk pool alongside the state's existing high risk pool program – the Comprehensive Health Insurance Pool, authorized by Ark. Code Ann. § 23-79-501 et seq. The CHIP program is currently funded by premium taxes and assessments levied on insurance providers.
Arkansas will receive $46 million to run the PCIP (which will run alongside the existing CHIP plan). CHIP's actuary, Milliman, estimates that amount of funding will cover about 2,500 people through Dec. 31, 2013. Initially, CHIP will cap enrollment at 2,500 people and provide coverage on a first come, first served basis. However, CHIP may raise or lower that cap based on actuarial experience once the federal pool is up and running. The PCIP has a deductible of $1,000 and a $2,000 limit on out-of-pocket expenses for in-network services. Rates the PCIP must be set at the same level as those available in the standard (non-high risk) individual market pursuant to federal statute. The rates range from $156.08 per month for a non-tobacco user under 30 years of age to $807.20 for a tobacco user over 59. On average the rates will be about 33% less than the current CHIP rates. CHIP began providing coverage on Sept. 1, 2010. As of Feb. 1, 2011, the program had enrolled 147 people.
In May 2011, the U.S. Department of Health and Human Services reduced the premiums offered by the federally administered Pre-existing Condition Insurance Plan. It also allowed states operating their own plans, like Arkansas, to lower premiums. The CHIP board is currently analyzing rates with its actuary to determine whether rates can be adjusted.