The Department of Health and Human Services yesterday announced the reduction of premiums and the easing of eligibility standards for the federal Pre-existing Condition Insurance Plan (PCIP), a program provided under the Patient Protection & Affordable Care Act to insure patients who have been denied private coverage due to pre-existing conditions.

Of the 23 states which offer PCIP, HHS Secretary Kathleen Sebelius said premiums will drop as much as 40 percent in 17 states, as well as Washington, D.C., to better align the program with each state's private insurance rates. Premiums will remain the same in the six states where PCIP premiums were already well-aligned with the market.

Sebelius also said the insurance plan will be easier to access. Among the eligibility requirements currently under PCIP, applicants must submit a denial of coverage letter from a private insurer in their state due to a pre-existing medical condition, or submit an insurance plan offered to them, which they denied because it excluded coverage for a pre-existing condition.

Under a new standard, which will be implemented July 1, applicants may submit a letter from a doctor acknowledging a pre-existing condition, as opposed to waiting for a denial of coverage from a private insurer.

Richard Popper, director of HHS' Office of Insurance Programs, said the drop in insurance premiums is being paid for by the original $5 billion provided to run the program and member premiums. Popper was unable to provide a cost estimate for the changes, but said they are being implemented in order to comply with the law and enroll more members. PCIP currently insures approximately 18,000 members.

“We’re making adjustments to comply with the law, which requires that premium rates in the pre-existing condition insurance plan be in line with standard rates in the standard insurance market,” Popper said.