Friday, February 10, 2012

PCIP, Head Scratcher Edition

PCIP, the taxpayer funded federal program for those with pre-existing medical conditions is one of the few sections of Obamacrap that I applaud.

If Congress had created PCIP and stopped there, all of us would be better off.

PCIP is an option for those who can't obtain health insurance through existing channels. It does come with a mandatory 6 month waiting period which has mixed reviews. PCIP has few requirements (other than rejection by health insurance carriers due to existing medical conditions) but one, somewhat contentious one, is requiring applicants to go naked (no health insurance) for at least 6 months prior to applying for coverage.

For what it's worth, you can be denied health insurance for any number of reasons, including if you are currently pregnant. There is no need to expound on the reasoning for denying coverage when you, or your spouse, is pregnant. What is important here is the potential for adverse selection.

For those who want a link to corroborating evidence, you won't find one. This post is not culled from a news source. Rather, it was discovered on a popular forum frequented by insurance agents.

Many agents, including myself, will refer adults who are pregnant (or have a pregnant spouse) to PCIP.

If you are currently pregnant and have not had health insurance for at least 6 months you can qualify for PCIP.

If you earn too much to qualify for Medicaid (which is a common route given that over half of all deliveries in Georgia are paid by Medicaid) there is PCIP.

Using PCIP to pay for maternity is, to me at least, preferable to Medicaid. Under Medicaid the mother has little or no "skin in the game" vs. PCIP that requires a premium to be paid as well as some out of pocket costs.

Using PCIP (and Medicaid) to fund a (mostly) planned event (or at least one that could be prevented) is a practice that can encourage one to shirk personal responsibility. As an adult, I believe there should be consequences.

But this is about adverse selection.

Here is the anecdotal punch line.

An agent I know posted about a situation where she has personal knowledge. A lady she knows was pregnant and looking for health insurance.

Forget the fact that most logical people understand you buy insurance BEFORE you need it.

The agent referred this woman to PCIP. She applied, was accepted, the plan paid for most of her prenatal charges and delivery during the 5 months she was on the plan.

Post delivery, she was notified she no longer qualified for PCIP since she no longer had a pre-existing medical condition.

She was booted off the plan . . . because she was healthy.

Yes, that is right.

Just like Seinfeld's Soup Nazi, she was told "No health insurance for you".

Go figure.

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