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Insurers Immediately Try to Game Health Care Regulations

It's all been just a game to the insurance companies. (photo: Bindaas Madhavi)

This is almost funny, if it weren’t so potentially tragic:

The DeSoto, Texas, mom had hoped the new health overhaul law that President Barack Obama signed Tuesday would immediately stop insurers from denying coverage to children with pre-existing medical conditions. Several speeches by Obama and explanations of the bill issued by congressional Democrats left the impression the law would do just that.

But health advocates and some insurers say the law does not clearly state that such protection starts this year. If it doesn’t, uninsured children with pre-existing conditions might not get help until 2014, when the law requires insurers to issue policies for all applicants regardless of health condition. There is no doubt that for children who are enrolled in insurance plans, the new law bars insurers from excluding coverage of any pre-existing conditions.

Responding to the concerns, Obama administration officials said Wednesday the law does prohibit insurers from denying children coverage starting this year, but they will issue clarifying regulations. “The law is clear: Insurance plans that cover children cannot deny coverage to a child because he or she has a pre-existing condition,” Health and Human Services spokesman Nick Papas said. “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 to his or her benefits once he or she is in the plan.”

What’s going on here is that some insurance company – or the trade group, AHIP – read the language in the bill and interpreted it favorably to their industry. They’re trying to wiggle off the hook of offering coverage for children with pre-existing conditions TWO DAYS after signage of the law.

There’s another part to this:

One thing is clear: The law does nothing to stop insurers from charging higher rates for children with pre-existing illnesses until 2014 when insurers can no longer use health status in setting premiums.

They mandated guaranteed issue for children immediately without mandating community rating. So as a result, families with a child with bad medical histories will get charged an astronomical amount for coverage.

If you don’t think this will happen for virtually every insurance regulation in the bill, you’re crazy. And on some of these less high-profile than the children’s exclusion, insurers will win.

The challenges facing the Affordable Care Act have really only just begun.

CommunityThe Bullpen

Insurers Immediately Try to Game Health Care Regulations

This is almost funny, if it weren’t so potentially tragic:

The DeSoto, Texas, mom had hoped the new health overhaul law that President Barack Obama signed Tuesday would immediately stop insurers from denying coverage to children with pre-existing medical conditions. Several speeches by Obama and explanations of the bill issued by congressional Democrats left the impression the law would do just that.

But health advocates and some insurers say the law does not clearly state that such protection starts this year. If it doesn’t, uninsured children with pre-existing conditions might not get help until 2014, when the law requires insurers to issue policies for all applicants regardless of health condition. There is no doubt that for children who are enrolled in insurance plans, the new law bars insurers from excluding coverage of any pre-existing conditions.

Responding to the concerns, Obama administration officials said Wednesday the law does prohibit insurers from denying children coverage starting this year, but they will issue clarifying regulations. “The law is clear: Insurance plans that cover children cannot deny coverage to a child because he or she has a pre-existing condition,” Health and Human Services spokesman Nick Papas said. “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 to his or her benefits once he or she is in the plan.”

What’s going on here is that some insurance company – or the trade group, AHIP – read the language in the bill and interpreted it favorably to their industry. They’re trying to wiggle off the hook of offering coverage for children with pre-existing conditions TWO DAYS after signage of the law.

There’s another part to this:

One thing is clear: The law does nothing to stop insurers from charging higher rates for children with pre-existing illnesses until 2014 when insurers can no longer use health status in setting premiums.

They mandated guaranteed issue for children immediately without mandating community rating. So as a result, families with a child with bad medical histories will get charged an astronomical amount for coverage.

If you don’t think this will happen for virtually every insurance regulation in the bill, you’re crazy. And on some of these less high-profile than the children’s exclusion, insurers will win.

The challenges facing the Affordable Care Act have really only just begun.

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David Dayen

David Dayen