SACRAMENTO -- About 17,000 Californians with serious medical problems will be moved from a state-run stopgap health insurance program to a federal plan starting in July, ensuring they will have no break in medical coverage until the national health care reforms kick in next year, state officials announced this week.
The state board that oversees the California Pre-Existing Condition Insurance Plan said participants will continue receiving benefits from the federal government until 2014. That's when the state's health benefit exchange, known as Covered California, goes online, and insurers will be required to accept all applicants, regardless of medical history, under President Barack Obama's health care law.
State officials said they will work with the Centers for Medicare & Medicaid Services to ensure benefits for people who cannot get health care coverage elsewhere. The transition program has become a lifeline for the so-called uninsurables -- patients who applied for insurance but were turned down because of such pre-existing conditions as cancer or heart disease.
"While this will be a change for our subscribers, it is a positive one in that it ensures their health coverage through year's end," said Cliff Allenby, chairman of the Managed Risk Medical Insurance Board, which oversees the pre-existing condition insurance plan, in a statement.
California is among 18 states in which the program is being taken over temporarily by the federal government. The money available to the states was capped at $5 billion, but the pot is running out because the care for the beneficiaries turned out to be more costly than expected. California law also stipulated that no state money could be used in the program.
About 100,000 people participate nationwide.
While health coverage will continue, state officials said out-of-pocket costs could rise. For example, the state's annual in-network deductible is $1,500 for each member but $2,000 under the federal program. Preventive care and doctor's office visits are fully covered by both.
Starting next year, subsidized private insurance will be available through Covered California, and the state is working on an expanded version of Medicaid for low-income people. At the same time, virtually all Americans will be required to carry a health insurance policy or pay a fine.