The White House has adopted a very sensible strategy in their scuffle with the insurance industry over the over-sold health care bill and the coverage of children with pre-existing conditions - declare victory and move on. Both sides win - leading Democrats don't want to explain that they can't successfully draft a bill and then proofread it, and the insurance industry doesn't want to explain that they want children to sicken and die. However, behind the kabuki we detect a musical comedy.
Ricardo Alonso-Zaldivar of the AP started this dust-up last week, and is back with what both sides hope is the public denoument:
Insurance industry agrees to fix kids coverage gapWASHINGTON — After battling President Barack Obama's health care overhaul the better part of a year, the insurance industry said Monday it won't try to block his efforts to fix a potentially embarrassing glitch in the new law.
In a letter to Health and Human Services Secretary Kathleen Sebelius, the industry's top lobbyist said insurers will accept new regulations to dispel uncertainty over a much-publicized guarantee that children with medical problems can get coverage starting this year.
Quick resolution of the doubts was a win for Obama — and a sign that the industry has no stomach for another war of words with a president who deftly used double-digit rate hikes by the companies to revive his sweeping health care legislation from near collapse in Congress.
This works for both sides. Team Obama didn't want to spend time in court explaining why Congress is incapable of drafting legislation that reflects their intent (actually, Congress had a more limited intent, IMHO, but I digress). And obviously insurers don't want to spend time explaining why they don't want to provide coverage for sick kids (As an aside, since insurance companies mainly recycle our premiums, it is We the Premium Payers who are generously providing this new coverage, as part of our higher rates).
However! The Politico reprints the stern letter from HHS head Sebelius and the insurer's kow-towing response, and it is laughably obvious that both sides are posturing.
Let's start with Sebelius, from her letter:
First, Congressional intent has, ahh, evolved since they wrote the bill, mainly to keep pace with Obama's over-promising and over-selling of the bill, as discussed in this recent post.
Sebelius more or less ends the charade when she announces what her firm new regulations will do - children with pre-existing conditions can not be dropped from their parents plan, and they cannot be subjected to specific exclusions and waiting periods based on pre-existing conditions.
That's telling them! For heaven's sake, that is essentially what the new law already says. Neither the AP nor anyone else thought that a parent taking insurance as part of an employer group plan would have a problem, and Ms. Sebelius has now assured us that they won't. Pop the champagne.
The problem is with individuals seeking private insurance for themselves and their family. There is no "guaranteed issue" requirement effective in 2010 under the new law; there is also no requirement that companies ignore health status in setting premiums. Here is Alonso-Zaldivar of the AP last week:
The coverage problem could mainly affect 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.
If an insurer refuses to sell to parents because they have a sick child, well, the insurance company is neither denying the child access to the parent's plan nor providing coverage subject to an exclusion.
As to Ms. Sebelius's assertion that she is preparing regulations that explain that the term "pre-existing condition exclusion" applies to both access to plans (i.e., issuance) and specific exclusions within a plan, well, good luck. The term "pre-existing condition exclusion" has been defined by statute for years; the definition was not substantively amended by the latest bill. The notion that she can fly in the face of years of state and Federal law and unilaterally present a new definition is, well, awe-inspiring. Or laugh inspiring.
That said, this is not a fight the insurers want to pursue in public. Hence, their very sensible response, which can be paraphrased as "we intend to comply with the regulations as you have described them". And since she described the current law, that is no big deal.
Now, if she drafts regulations that over-reach on terms defined by statute, well, I bet somebody will sue, just in the name of responsible governance. Or, depending on circumstances, an insurer might simply defy the regulations and dare anyone to sue them.
MORE: From the Times:
In response to a question, Nick Papas, a spokesman for the Department of Health and Human Services, said that the rules would require insurers to offer coverage to children with pre-existing conditions, including families who have not had health insurance in the past.
It was not immediately clear whether the rules would allow insurers to charge higher premiums to families with children with pre-existing conditions than to families that are identical in other respects.
Well, it is immediately clear that Congress did not make the new provisions regarding equal pricing effective in 2010 for children, even though they did move up the effective date for the ban on pre-existing condition exclusions from 2014 to 2010 for children. The idea that the HHS can unilaterally change the effective date of legislation that Congress just passed is pretty interesting.
IF KATE PICKERT IS WITH ME, WHO WILL STAND AGAINST ME?
From my BFF at TIME:
Despite Administration "Win," Some Sick Kids Will Remain Uninsured
...A "win" for Obama? Well yes. The Administration is enjoying a day of headlines trumpeting its victory over insurance companies. The headline in Politico's daily health care e-mail blast was “SEBELIUS LAYS DOWN THE LAW.” Pretty tough stuff. Plus, the clarification means Democrats will still be able to tout this immediate benefit of health reform during this year's congressional campaigns. But is it a win for sick kids who can't get insurance coverage? Maybe, in some cases.
Although insurers have promised to sell insurance policies to families with kids with pre-existing conditions, there is nothing to stop the insurance companies from charging whatever they want. Until 2014, insurers will still be allowed to set premiums rates in the individual market based on health status. For a kid with a bad health status – like cystic fibrosis, say, or cancer – that means very high premiums that families might still not find affordable. Insurers are not going to simply absorb the cost of covering these expensive cases; they will pass the expenses on to policy holders.
Of course, there aren't many kids in this situation. The vast majority of kids with pre-existing conditions are covered by Medicaid, CHIP or employer-sponsored insurance. Only about 10% of children are uninsured and only a small percentage get their coverage in the individual market, where the pre-existing exclusion issue matters. But the parents of an uninsured middle-class kid with cancer are still going to face a pretty tough financial challenge buying coverage on the open market.
The pre-existing exclusion clarification is a start at helping these families, but it's by no means a complete solution. In other words, a loophole remains and it's one that won't be closed for four more years.
STILL MORE: Jake Tapper of ABC explains that the bill was not written to do what Congress says it was meant to do:
I am not sure why Praeger is so sure that Congress brain-locked on advancing the effective date of the guaranteed issue provision for children in parallel with advancing the adequacy provision, rather than simply making a judgment about what was practical and politically feasible. This is not some drafting subtlety, but is a very basic point. This brave new world in which we judge Congressional intent by their press releases rather than the final bill is troubling.Eliza Bangit, senior research associate at Georgetown University Health Policy Institute, says that protections for consumers in health care legislation are typically divided into three categories: Access, affordability, and adequacy. The provisions in the bill that explicitly address access -- requiring an insurance company to offer insurance -- begin in 2014.
The protections for children that kick in this year do “not talk about access,” Bangit says. The provisions, she says, really only address adequacy -- requiring that pre-existing conditions are covered by insurance. “The law does not talk about access for children. It could have been oversight, I don’t know. But access is just different from adequacy, it always has been. We always make the differentiation.”
Kansas Insurance Commissioner Sandy Praeger, past president of the National Association of Insurance Commissioners, agrees with this interpretation.
“In looking at the bill, our experts were concerned there’s no ‘guaranteed issue’ until 2014,” Praeger told ABC News. “’Guaranteed issue’ means when you’re out buying insurance, they have to offer coverage to anybody who wants to buy in – there’s nothing about how much they can charge, but they have to offer it.”
Praeger says Congress “intended there to be guaranteed issue, but the bill’s not written that way…It’s not in the law.”
And on that point the Children's Health Protection Act of 2009 (S643), which was introduced in March 2009 and was eventually folded into the final bill, did not have guaranteed issue language either. Again, was that also an oversight? Or was Congress eliminating the HIPAA waiting periods for children with pre-existing conditions, where guaranteed issue is not in play? Ahhh...
just wait for the insurance companies to try and raise their rates to cover this ... anyone whos premiums will rise should have standing to sue and claim that there is no legal requirement to cover these kids and thus they should not have to be charged higher premiums to cover them ...
a nation of laws ? or a lawless nation ?
Posted by: Jeff | March 30, 2010 at 02:25 PM
CYA move by Sebelius to assist Obummer and his cronies from appearing to be incompetent.
Posted by: maryrose | March 30, 2010 at 02:29 PM
Yoo Hoo, Narcisco!
Looky here - think you might like this:
Guest list and a few other details here.
Posted by: centralcal | March 30, 2010 at 02:41 PM
OK, none of the kabuki covers the rates the insurer is going to offer to cover the non-excluded child.
The insurers have no reason to complain here. They can price the coverage however they want until 2014.
(Eveybody, excet TM and the firedoglake blogger he cited yesterday, missed that one.
Posted by: Appalled | March 30, 2010 at 02:49 PM
Thanks CC,saw that on another blog, first, just got tired of the bozon cloud, on the earlier thread, btw, one of the candidates
she will be supporting is Colonel Allen
West
This is the real threat, of this bill, it gives Sibelius or whoever becomes Health Insurance Commissioner, carte blanche to write any kind of regulation they like
Posted by: narciso the harpoon | March 30, 2010 at 02:59 PM
They can price the coverage however they want until 2014.
Not exactly. Even the monopolist has an optimal price, above which his profit will decline. If the price required to cover their anticipated claims payments plus a reasonable return is above optimal for the insurers--and it seems certain to be--they will face ultimate bankruptcy, and many people will be very hard put to remain insured. Then, voila, it's public option to the rescue.
Keep in mind that the absence of any enforcement mechanism for the individual mandate is by no means an accident, or the result of poor drafting. It took an affirmative, deliberate act to oust the IRS of its normal enforcement tools for scofflaws in this particular instance.
Posted by: Danube of Thought | March 30, 2010 at 03:08 PM
What office is Col. West seeking?
Posted by: Danube of Thought | March 30, 2010 at 03:10 PM
The insurers have no reason to complain here.
No kidding. This thing is a bonanza for them (primarily from those previously uninsured who'll be forced to buy), and they can pass along this minimal cost as well. (At least until this and other millstones sink the whole economy.)
At least now we know fearmongers like TM were off base . . . after all, it doesn't really matter what's in the bill if you're just going to ignore it anyway.
Posted by: Cecil Turner | March 30, 2010 at 03:12 PM
22nd District of Florida, Here's the message with the link to all three candidates, WArd,
Kinsinger, and West:
Posted by: narciso the harpoon | March 30, 2010 at 03:18 PM
Cong Fla. Dist 22..I supported him the last time when he lost to Ron Klein and I'll support him again.
Posted by: Clarice | March 30, 2010 at 03:20 PM
What office is Col. West seeking?
Congress, Florida - District 22
Posted by: Barbara | March 30, 2010 at 03:20 PM
Following my own advice about shunning the fools that visit from time to time, nonetheless I have been shaking my head all afternoon about the observation several threads back that the problem with our tax system is that it is not progressive enough, and in particular it does not attack capital to a sufficient degree. So that we appreciate our trolls and their point of view, from Wiki I offer the following:
"Socialists generally share the view that capitalism unfairly concentrates power and wealth among a small segment of society that controls capital and derives its wealth through a system of exploitation. This in turn creates an unequal society, that fails to provide equal opportunities for everyone to maximise their potential, and does not utilise technology and resources to their maximum potential nor in the interests of the public."
We could go on about the role of capital as a means of production and the linkage of same to the creation of jobs, and how "if you want less of something, tax it more", but those concepts are always lost on that person.
Because, as was stated, "the worst that can happen is we will be like Europe and that is not too bad."
Reading is a dangerous thing. Understanding even more so.
Posted by: Old Lurker | March 30, 2010 at 03:39 PM
Top-down, central planning, by Washington lawyer/politicians. Yeah, this is gonna work out well!
I give it 12 months before much of Obamacare is gutted as unworkable, stifling to business and thus creating unemployment and the loss of individual liberty at the expense of trying to be all things to all people (what libs love - egalitarianism).
Posted by: gsr | March 30, 2010 at 04:03 PM
Let's see, since roughly 85% of Americans already have health insurance (100% have healthcare, by the way) and since about two-thirds of Americans firmly oppose Odumbocare.....gonna be a rough November for our lib/socialist friends. And just wait to this wimp's policies start getting rolled back, repealed and minimized.
T-minus, two years, seven months and a few days and counting....
"Honk, if I'm paying your healthcare!"
Posted by: bet | March 30, 2010 at 04:10 PM
Let's see, since roughly 85% of Americans already have health insurance (100% have healthcare, by the way) and since about two-thirds of Americans firmly oppose Odumbocare.....gonna be a rough November for our lib/socialist friends. And just wait to this wimp's policies start getting rolled back, repealed and minimized.
T-minus, two years, seven months and a few days and counting....
"Honk, if I'm paying your healthcare!"
Posted by: bet | March 30, 2010 at 04:12 PM
in particular it does not attack capital to a sufficient degree
Agreed. This was so breathtakingly stupid that I had to walk away for the computer. Where is the money that is necessary to build the businesses that hire all those people supposed to come from? The government? Like the SBA? Right.
If taxes on capital are raised, the ROI across a portfolio that is required to invest just goes up. That just limits the number of companies that get funded.
So much for innovation.
Posted by: DrJ | March 30, 2010 at 04:15 PM
We had exactly the same reaction, DrJ. I just had to walk away.
Posted by: Old Lurker | March 30, 2010 at 04:20 PM
OL & DrJ,
Dan Akroyd used a method worth copying when dealing with the unreachable and unteachable. If people began their replies with the acronym S,YIS it would add an element currently missing from discourse with the demented dolt.
Posted by: Rick Ballard | March 30, 2010 at 04:24 PM
Obamacare is such poorly designed legislation, so 1930’s style state-run “command and control” policy that it won’t likely have but tiny bits of it enacted. It destroys capital, incentivizes more dependency on government and stifles business enterprise, which means fewer jobs for Americans by shifting some healthcare jobs overseas. In fact, you could call it a job stimulus program for China and India.
Posted by: jppt | March 30, 2010 at 04:27 PM
OL, I'm afraid your gutterman is making my house the neighborhood's taj mahal. There was a note in my mailbox from another neighbor I never heard of begging for the name of my gutterman.Action better cut me in on thi.
Posted by: Clarice | March 30, 2010 at 04:29 PM
"...which means fewer jobs for Americans by shifting some healthcare jobs overseas."
Much worse than that, jppt. Since the cost of employing all Americans will go up relative to the rest of the world, more work of all sorts will be better done off shore. Couple that with the attack on capital itself, and that capital will be - what was that movie? Gone in Sixty Seconds - and it will end up where the aforementioned jobs have gone.
Child's play.
Posted by: Old Lurker | March 30, 2010 at 04:35 PM
We'll split it Clarice. Our next dinner should be on Randy!
Posted by: Old Lurker | March 30, 2010 at 04:37 PM
Sounds perfect,OL.
Posted by: Clarice | March 30, 2010 at 04:41 PM
--and in particular it does not attack capital to a sufficient degree--
Don't let that dimwit off so easy OL.
She contended not only that capital was not taxed sufficiently but that it was taxed insufficiently in comparison to consumption.
Other than a few excise taxes on relatively modest portions of the economy the only siginificant taxes on consumption are state sales taxes and state and federal fuel taxes.
Imagine the wail of anguish emanating from sylvia when Barry proposes his VAT to pay for her precious Obamacare. Talk about skewing the old tax burden toward consumption.
Posted by: Ignatz | March 30, 2010 at 04:51 PM
that capital will be - what was that movie? Gone in Sixty Seconds - and it will end up where the aforementioned jobs have gone.
Exactly right. Though there are a few poor sods like me would would have to pay our grants back if an overseas move happens. That adds to the relocation cost somewhat.
Posted by: DrJ | March 30, 2010 at 04:51 PM
that it [capital] was taxed insufficiently in comparison to consumption.
I noticed that too, Ignatz. My jaw hit the keyboard.
Posted by: DrJ | March 30, 2010 at 04:53 PM
Then again, destruction of wealth/capital is the goal of socialism/communism. Is 'Ol Big Ears a socialist/communist?
A man who never started a business, never ran a business, never even really worked at a regular job that wasn't a taxpayer funded, government job.
Hmm, a socialist? He quite likely is one, like his father, his teenaged mentor, his pastor and his "education" friend.
Posted by: l5j6f7 | March 30, 2010 at 04:56 PM
Latest Zogby poll--42% of Dems support Israel ; 92% of Republicans do:
http://www.americanthinker.com/blog/2010/03/huge_gap_in_support_for_israel.html>Partisan gap
Posted by: Clarice | March 30, 2010 at 05:03 PM
I was not even sure what that meant..."in comparison to consumption".
In any event, that thinking, by so many, is why so many of us are so depressed. As DoT says, countries like our do not come along often. Once lost, we will not see it again in our lifetimes.
Posted by: Old Lurker | March 30, 2010 at 07:11 PM
"Latest Zogby poll--42% of Dems support Israel ; 92% of Republicans do."
And yet, US Jews vote in worse than a reverse ratio.
Go figure.
Posted by: Old Lurker | March 30, 2010 at 07:13 PM
Are the individual mandates enforceable under the terms of this Act or not? I'll leave it to others to parse through the analysis set forth here.
Posted by: Danube of Thought | March 30, 2010 at 07:18 PM
Perfectly blending the idea of taxes and insurance, eh DoT?
===================
Posted by: Man, that's slick. | March 30, 2010 at 08:49 PM
Federal VAT is already there: it is 2.3% tax on medical devices, including tampax and bandaid. Been there, seen this. Next step will be taxing of “luxury” items, like jewelry and up-end cars. BTW, is such taxation constitutional?
Posted by: AL | March 31, 2010 at 03:27 AM
That's really funny - tax on income;
tampons and condoms are income?
Posted by: BR | March 31, 2010 at 04:44 AM
What next, a tax on incumbents?
Don't the bill writers know how to spell?
Posted by: BR | March 31, 2010 at 04:46 AM
Will there be a tax on sex as part of the Amnesty bill?
Posted by: BR | March 31, 2010 at 04:50 AM