The first “unintended consequence” of the Patient Protection and Affordable Care Act (PPACA) addressed in Part 1 of the blog described how routine physical exams were not specifically listed as a preventive service under health reform so insurance companies do not have to cover this service. The second “unintended consequence” of health reform addressed in Part 2 of the blog revealed how most insurance companies are not offering individual insurance policies to children under 19 since they are prohibited from applying pre-existing conditions exclusions. The third and final “unintended consequence” of health reform that I will discuss relates to dependent children under the age of 26 staying on their parents’ plans.

The first “unintended consequence” of the Patient Protection and Affordable Care Act (PPACA) addressed in Part 1 of our blog described how routine physical exams were not specifically listed as a preventive service under health reform so insurance companies do not have to cover this service. Today, we will discuss the second “unintended consequence” of health reform, which addresses how new individual insurance policies are prohibited from applying pre-existing conditions exclusions for children under 19.

Wikipedia states that the law of unintended consequences is a warning that an intervention in a complex system always creates unanticipated and often undesirable outcomes. Unfortunately, health reform has “unintended consequences” written all over it. Three specific examples include: preventive care, no pre-existing conditions for children under 19, and dependent children under the age of 26 staying on parents’ plans. I’ll focus on the first topic today: preventive care.

On May 31, 2011, the U.S. Department of Health and Human Services (HHS) announced that premiums will be reduced and eligibility requirements will be eased when enrolling in the federally administrated Pre-Existing Condition Insurance Plan (PCIP).

The DOL, HHS, and IRS jointly issued another set of FAQs (Part V) regarding implementation of the market reform provision Affordable Care Act, with topics including auto-enrollment in group health plans, summary of benefit disclosure requirements to group health plan participants, grandfathered plans, dependents to age 26 requirements, preexisting condition requirements for children in individual health policies, and value-based insurance design in connection with preventive care benefits.

The Obama administration predicted that hundreds of thousands of people would enroll in the Pre-existing Conditions Insurance Plan (PCIP), but the actual enrollment only totaled 8,011 as reported November 5, 2010. As a result, the Department of Health and Human Services (HHS) announced the federally-administered PCIP program will expand the one option offered in 2010 to three options in 2011: the Standard Plan, the Extended Plan and the Health Savings Account eligible plan. In addition, families will be able to enroll their eligible children age 0-18 in PCIP at child-only rates.

Ways and Means health panel Chair Pete Stark (D-Calif.) said, “Plain and simple, insurance companies can’t be trusted.” This comment was Stark’s response to the announcement that most insurance companies will no longer sell new individual policies for children under 19 as health reform now prohibits pre-existing conditions exclusions.

While I understand that this is a sensitive and important topic, I am still amazed at how much negative press insurance companies are receiving for 3 reasons.

Benefit amounts and monthly premiums for the Pre-existing Conditions Insurance Plan (PCIP) are now available on www.healthcare.gov. In addition to the monthly premium, participants will be responsible to pay other costs such as deductibles, co-payments, and out-of-pocket charges.

The government published responses to frequently asked questions on the www.healthcare.gov website. Several of those questions and answers are included below to provide more detailed information on the high-risk pool.

On July 1, eligible residents of South Carolina will be able to apply for coverage through the state’s PCIP program run by the U.S. Department of Health and Human Services.