Government is cutting rates for hard-to-insure patients

Now, federal officials estimated that premiums in some states could come down as much as 40 percent, thanks to a more refined analysis of what the plans should charge.

The administration is directly slashing premiums in most of the 23 states and the District of Columbia that have elected to have the federal government run their health plans. The remaining 27 states, which each runs its own plan, will be able to reduce premiums, as well.

At the same time, the administration will no longer require applicants for these plans to furnish a letter from an insurance company showing they had been denied coverage. Instead, applicants will need only a letter from a doctor, nurse, or physician's assistant stating they have a medical condition.

Applicants will still have to show they had been without coverage for at least six months.

The moves to step up efforts to get people into these plans drew praise from several patient groups, including the American Cancer Society's Cancer Action Network and the American Heart Association. Dr. John H. Klippel, CEO of the Arthritis Foundation, said the recent changes "are critically important for all people with chronic diseases."

The expansion of Preexisting Condition Insurance Plans is made possible by $5 billion that was set aside in the new law.

Because just 18,000 people nationwide had signed up for a plan, much of that has not been spent, according to the Department of Health and Human Services.

Richard Popper, who oversees the plans, said the department had not estimated how much the change in rules would end up costing. Nor would the department say how much of the $5 billion remains.