It doesn't get better than this (I am sorry to say...) - Senate Permanent Minority Leader Mitch McConnell and Barack Obama have vastly different understandings of a highly touted provision of the newly-enacted health care reform. They can't both be right! Let's roll the tape. OK, roll the transcript - here is the Senator, from last weekend:
Just one day after the president signed this bill into law, we got word that one of its celebrated early features -- a ban on discriminating against children with pre-existing conditions -- won’t immediately protect children after all.
But my goodness - Barack Obama has been telling people since December that children with pre-existing conditions cannot be denied coverage. Here is in on December 19 2009, discussing the Senate "managers's amendment", one of the last acts before the final Senate vote:
And a recent amendment has made these protections even stronger. Insurance companies will now be prohibited from denying coverage to children immediately after this bill passes.
Here he goes again in a weekly radio address on January 9, describing the immediate benefits of the health reform bill:
Uninsured Americans with a pre-existing illness or condition will finally be able to purchase coverage they can afford.
Children with pre-existing conditions will no longer be refused coverage, and young adults will be able to stay on their parents’ policy until they’re 26 or 27 years old.
Let's start with how health insurance reform will expand and strengthen coverage:
This year, children with pre-existing conditions can no longer be denied health insurance coverage. Once the new health insurance exchanges begin in the coming years, pre-existing condition discrimination will become a thing of the past for everyone.
So who is right? And how did we reach this level of misunderstanding? I can help.
First, the AP, Kaiser Health News and Mitch McConnell are correct. Folks reassured by an appeal to authority will note that the AP has quotes from two Democrats supporting their interpretation:
Under the new law, insurance companies still would be able to refuse new coverage to children because of a pre-existing medical problem, said Karen Lightfoot, spokeswoman for the House Energy and Commerce Committee, one of the main congressional panels that wrote the bill Obama signed into law Tuesday.
...Full protection for children would come in 2014, said Kate Cyrul, a spokeswoman for the Senate Health, Education, Labor and Pensions Committee, another panel that authored the legislation. That's the same year when insurance companies could no longer deny coverage to any person on account of health problems.
Folks who distrust authority and want to see for themselves will be fascinated by the supplement to this post, where we dig through the text of various bills to piece the arguments together.
What went wrong? Basically we have witnessed a communications breakdown between people who speak English (like Barack Obama, who is not a student of insurance arcana) and the people who speak "Insurance".
The Senate manager's amendment was described in their December 19 press release thusly:
Immediate ban on preexisting condition exclusions for children. Health insurers will be immediately prohibited from excluding coverage of preexisting conditions for children.
We can find a similar description from the House, released in February:
No Pre-existing Coverage Exclusions for Children
The President's proposal eliminates pre-existing condition exclusions for all Americans beginning in 2014, when the Exchanges are operational. Recognizing the special vulnerability of children, the plan prohibits health insurers from excluding coverage of pre-existing conditions for children, effective six months after enactment and applying to all new plans.
Now a speaker of English might not recognize that "pre-existing condition exclusion" has a specific meaning and legislative history (e.g., 2007, 2009) within the health insurance field; HIPAA imposed new Federal standards in 1996. Put simply, insurers deny coverage to people; they exclude coverage of conditions.
A pre-existing condition can affect your health insurance coverage. If you are applying for insurance, some health insurance companies may accept you conditionally by providing a pre-existing condition exclusion period.
Although the health plan has accepted you and you are paying your monthly premiums, you may not have coverage for any care or services related to your pre-existing condition. Depending on the policy and your state’s insurance regulations, this exclusion period can range from six to 18 months.
So previously a health insurer could simply refuse to enroll a particular applicant or they could accept an applicant subject to restrictions on coverage of the applicant (or in this case, an applicant's child). If we are talking about a group plan offered by an employer, turning the applicant down is not an option; HIPAA regulated the waiting periods during which a pre-existing condition exclusion could be applied, and this new bill reduces those waiting periods to zero for children (after it takes effect in September 2010).
Anyway, the manager's amendment came out and speakers of English took "no more pre-existing coverage exclusions for children" to mean "children could not be excluded from coverage on the basis of pre-existing conditions". The self-styled Wonk Room at Think Progress provides an example; Barack Obama himself provided another.
Which takes us where? My guess is that the people who do this for a living have known for a while that Obama was just making stuff up. (How Mitch McConnell and his fellow Attack Senators missed this is an annoying puzzle. I know they were not involved in the final negotiations that led to this text, but still - they should feel free to read the bill and hold the other side accountable before the final vote.)
And what happens next? MSNBC got a response from HHS saying all would soon be well:
"Under the Act, plans that include coverage of children cannot deny coverage to a child based upon a pre-existing condition. To ensure that there is no ambiguity on this point, the Secretary of HHS is preparing to issue regulations next month making it clear that the term 'pre-existing exclusion' applies to both a child's access to a plan and his or her benefits once he or she is in the plan for all plans newly sold in this country six months from today."
Nonsense - if HHS could solve this by regulatory fiat, why would Congress vex themselves by passing bills? This will require a legislative fix (Some Democratic Congressman was quoted as saying just that, and I managed to lose the link.)
If, I say if this was an actual oversight by Congress then they will need to pass new legislation to fix it. Republicans risk being painted as ogres if they oppose it, but Obama risks being mocked as Biden-esque for touting benefits that weren't actually in the bill.
Based on the structure of the bill (as described below), I don't think this was any sort of oversight or drafting error; I think Congress took a small, simple step towards immediate reform so they could point to something that would actually happen in 2010, and Obama misunderstood and misoverrsold it.
INTO THE BILL:
The text of the Senate bill can be found here.
The structure of the bill is that parts of it modify existing legislation (the Public Health Service Act); the relevant passage being modified is here.
Page three of the Senate bill provides a table of contents we can use as a bit of a road map for the bill:
‘‘SUBPART I—GENERAL REFORM
‘‘Sec. 2704. Prohibition of preexisting condition exclusions or other discrimination
based on health status.
‘‘Sec. 2701. Fair health insurance premiums.
‘‘Sec. 2702. Guaranteed availability of coverage.
‘‘Sec. 2703. Guaranteed renewability of coverage.
‘‘Sec. 2705. Prohibiting discrimination against individual participants and
beneficiaries based on health status.
‘‘Sec. 2706. Non-discrimination in health care.
‘‘Sec. 2707. Comprehensive health insurance coverage.
‘‘Sec. 2708. Prohibition on excessive waiting periods.
Section 2704 (p. 81 and following) addresses the pre-existing condition exclusions; 2705 disallows pricing differences (including rebate awards to the healthy) based on health status. 2702 says insurers must issue to anyone in their region, and 2703 says they must renew. The net effect of 2701 to 2705 is that insurers must offer and renew insurance with anyone, can't price differently based on pre-existing conditions, and can't decline to cover (i.e, exclude) specified pre-existing conditions. All of this takes effect on January 1, 2014.
But wait! Much later (p. 2065, line 14) we come to an amendment moving forward the effective date of Section 2704 for children under the age of 19:
(e) Section 1253 of this Act is amended insert before the period the following: ‘‘, except that— ‘‘(1) section 1251 shall take effect on the date of enactment of this Act; and ‘‘(2) the provisions of section 2704 of the Public Health Service Act (as amended by section 1201), as they apply to enrollees who are under 19 years of age, shall become effective for plan years beginning on or after the date that is 6 months after the date of enactment of this Act.’’.
Well, that is something - Section 2704 was accelerated for children. But what about Sections 2701, 2702, 2703 and 2705? Nope. If insurers offer coverage it cannot be subject to exclusions, but nothing in these laws obliges them to offer anything.
As the AP noted, this is not a big deal for people operating in the employer group market, where HIPAA guidelines are already in place. However:
The coverage problem mainly affects parents who purchase their own coverage for the family, as many self-employed people have to do. Families covered through employer plans typically do not have to worry about being denied coverage because of pre-existing conditions.
Parents whose kids are turned down by an insurer would still have a fallback under the law. They could seek coverage through state high-risk insurance pools slated for a major infusion of federal funds.
Presumably the Obama fallback spin will be that, net of the changes in the employer group market and the increased funding for high-risk pools, kids ought to be able to get coverage. Of course, that is different from Obama's claim that "Children with pre-existing conditions will no longer be refused coverage", but maybe it's close enough.
WORDS MEAN WHAT HE WANTS THEM TO MEAN: It's Obama in Wonderland, but it's the rest of us that are left wondering what he means. I think that Obama, by merrily conflating "pre-existing condition exclusion" with denial of coverage, is trying to make domestic policy by gaffe the same way he has tried to make foreign policy by gaffe.
DID CONGRESS UNDERSTAND THE BILL? Maybe! In rationalizing the need for an individual mandate, the bill includes this (p. 320):
(G) Under sections 2704 and 2705 of the Public Health Service Act (as added by section 1201 of this Act), if there were no requirement, many individuals would wait to purchase health insurance until they needed care.
From which we infer that Congress understood that Section 2705 was an important part of the new protections for people with pre-existing conditions. But they didn't accelerate it for children.
REPEATING FOR EMPHASIS: A year ago S 643 was introduced in the Senate. Do you think these people believed they were eliminating any right of insurers to deny coverage outright?
Children's Health Protection Act of 2009 (Introduced in Senate)
S 643 IS
111th CONGRESS 1st Session S. 643 To amend title I of the Employee Retirement Income Security Act of 1974, title XXVII of the Public Health Service Act, and the Internal Revenue Code of 1986 to prohibit pre-existing condition exclusions for children in group health plans and health insurance coverage in the group and individual markets.