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HHS unveils insurance plan for those with pre-existing conditions

By Saundra Young, CNN
  • Plan to cover people denied insurance because of a pre-existing condition
  • PCIP will take effect July 1 and cover as many as 350,000
  • Federal government will run program in 21 states, 29 others will run their own
  • Plan is to serve as a bridge until health care bill starts in 2014

Washington (CNN) -- The Department of Health and Human Services rolls out a new program Thursday to assist Americans who have unable to get health insurance coverage because of pre-existing conditions.

The Pre-existing Condition Insurance Plan will provide coverage to as many as 350,000 individuals. It will bridge the coverage gap until the Affordable Care Act goes into effect in 2014.

"For too long, Americans with pre-existing conditions have been locked out of our health insurance market, " said Secretary Kathleen Sebelius. "Today, the Pre-Existing Condition Insurance Plan gives them a new option -- the same insurance coverage as a healthy individual if they've been uninsured for at least six months because of a medical condition. This program will provide people the help they need as the nation transitions to a more competitive and fair marketplace in 2014."

To be eligible, patients must have been denied insurance by a private insurance company because of a pre-existing condition, been uninsured for at least 6 months, and must be a U.S. citizen or a legal resident.

Jay Angoff, director of the Office of Consumer Information and Insurance Oversight at the U.S. Department of Health and Human Services, said the new plan will fill critical gaps and provide immediate relief for families and small businesses.

"Health coverage for Americans with pre-existing conditions has historically been unobtainable or failed to cover the very conditions for which they need medical care," Angoff said. "The Pre-Existing Condition Insurance Plan is designed to address these challenges by offering comprehensive coverage at a reasonable cost."

In 21 states, the federal government will run the program. Twenty-nine states plus the District of Columbia will run their own plans.

They will be run much like the Children's Health Insurance Program (CHIP). States will have to meet basic requirements but will have flexibility to run their program as they see fit.

States where HHS runs the program will share the same plan structure. Cost and benefits will vary by state, premiums could cost from $140 to $900 per month. Age will also be a factor -- in most states younger individuals will pay less than those 60 to 64 years old.

The plan will cover a wide range of benefits, both primary and specialty care, hospitalization and prescription drugs. Eligibility is not based on income.

In states where HHS runs the program, enrollment will begin Thursday. States running their own plans are expected to begin enrollment by the end of the summer. People who get their applications in by July 15 can expect coverage to begin August 10.

Consumers looking for information about the plan, health coverage options and where to apply in their state can go to the new HHS website at