Guaranteed-Issue Coverage for Children with Preexisting Conditions     When you draft 2,700+ pages of health reform legislation, give members of Congress and the American public barely 72 hours to read the provisions, and allow for limited amendments to the measures throughout the process, there are bound to be mistakes. One of the first drafting errors in the new health reform legislation that came to light this past week concerns the coverage of preexisting conditions in children. President Obama campaigned on this issue, and he and his administration have repeatedly touted eliminating the ability to deny coverage to children with preexisting conditions, and requiring the coverage of such conditions with no look-back or exclusionary periods, as one of the first benefits of the new reform laws. The President and congressional Democrats have repeatedly cited these provisions as benefits that will help American children within the next six months. A small problem, though—the new laws don’t actually say that.

The new measures do require health plans serving all markets—individual, small and large-group and self-funded—to cover the preexisting conditions in children age 19 and under with no limitations if the coverage is already offered or in force for all plan years beginning on or after six months of the March 23, 2010, enactment date. However, the new laws do not require insurers in all markets to guarantee-issue coverage to anyone at any age until plan years beginning on or after January 1, 2014. That means for the markets where health insurance coverage is not guaranteed issue under existing federal or state law (the individual market in most states and technically the large-group market), insurers could choose to not offer coverage in the first place to a child with a preexisting medical condition. 

Once this mistake came to light, the Obama administration immediately responded that it was the intent of the legislation to both offer these children access to coverage and provide for that coverage without regard to preexisting condition. Federal Department of Health and Human Services Secretary Kathleen Sebelius wrote a letter to Karen Ignagni, president and chief executive officer of America’s Health Insurance Plans (AHIP), blaming insurers for potentially failing to offer such affected children coverage, and indicating the administration’s plan to correct the problem in the new laws via federal regulation:

“Unfortunately, recent media accounts indicate that some insurance companies may be seeking to avoid or ignore a provision in the new law that prohibits insurance companies from excluding children with preexisting conditions from coverage.
 
“To ensure that there is no ambiguity on this point, I am preparing to issue regulations in the weeks ahead ensuring that the term ‘preexisting condition 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. These regulations will further confirm that beginning in September 2010:

• Children with preexisting conditions may not be denied access to their parents’ health insurance plan;
  
• Insurance companies will no longer be allowed to insure a child, but exclude treatments for that child’s pre-existing condition.
   

I urge you to share this information with your members and to help ensure they cease any attempt to deny coverage to some of the youngest and most vulnerable Americans.”

AHIP President Karen Ignagni quickly sent back a response indicating that “With respect to the provisions related to coverage for children, we await and will fully comply with regulations consistent with the principles described in your letter.”
]]> http://bluemoonbenifits.wordpress.com/2010/04/06/guaranteed-issue-health-insurance-for-children-gets-clarification/feed/ 0 bluemoonbenifits http://bluemoonbenifits.wordpress.com/2010/03/31/pre-existing-loop-hole-avoided/ http://bluemoonbenifits.wordpress.com/2010/03/31/pre-existing-loop-hole-avoided/#comments Wed, 31 Mar 2010 15:31:07 +0000 bluemoonbenifits http://bluemoonbenifits.wordpress.com/2010/03/31/pre-existing-loop-hole-avoided/ ]]> Agreement Reached On Pre-Existing Conditions Loophole.
NBC Nightly News (3/30, story 5, 2:40, Todd) reported that “last week some insurance companies claimed that vague language in the new law meant they could deny coverage of children with pre-existing conditions until 2014. Well, Health Secretary Kathleen Sebelius sent a harshly-worded letter to insurance companies saying that was not the intention of the law. Well guess what? The insurance company sent a letter back saying they would comply with the Obama Administration’s interpretation of these new rules.”

ABC World News (3/30, story 3, 2:15, Tapper) also reported that there is now “some clarity…on the confusion over whether or not the new law requires insurance companies to provide insurance for children with pre-existing conditions. The Obama Administration has said they will have the HHS Health and Human Services issue guidelines making it clear that insurance companies do have to do that as of September and the insurance industry has just said they will abide by those regulations.”

The New York Times (3/31, Pear) quotes Karen Ignagni, president of America’s Health Insurance Plans, as saying, “Health plans recognize the significant hardship that a family faces when they are unable to obtain coverage for a child with a pre-existing condition. … We await and will fully comply with” the new rules.” According to the Times, the White House “immediately claimed victory. In a Twitter message, Robert Gibbs, the White House press secretary, scored the tug of war as ‘Kids 1, insurance 0.’”

From NAHU
We know many of you have questions about what the newly passed health care reform legislation, H.R. 3590, contains and how it will impact you and your clients. NAHU is working hard to provide you with the information and tools you need to better understand the changes and what your clients need to know moving forward.

We have assembled two new charts this week to help you better understand and explain the provisions and timeline for implementation of the new law. The first is a very detailed chart for your reference that explains how all of the new health insurance reforms in both the Senate bill and the reconciliation bill will impact private health insurance organized by effective date. The second chart is a simplified timeline that explains how both pieces of health care reform legislation will impact your individual and employer clients. Please feel free to use these documents as part of your business and distribute them to clients if you wish.

If you are insured and pay on your own
You can keep your current plan — or — you can buy coverage through new state-run insurance marketplaces, called “exchanges,” starting in 2014.

If you keep your current plan:

• Within six months, the plans will have to stop some practices, like setting lifetime limits on coverage and canceling policy holders who get sick. They will also have to allow children to stay on their parents’ policies through age 26 and cover children with pre-existing conditions, but can still deny adults with medical problems until 2014.
• Premiums for individual policies will be 10 percent to 13 percent higher by 2016 than the average premium that year under current law, according to Congressional estimates. But most people would qualify for subsidies, meaning they might pay less than they do now.
• High-income earners — families making more than $250,000 — will pay several thousand dollars more in Medicare payroll taxes starting in 2018. Their unearned income, now exempt from the payroll tax, would also be subject to a 3.8 percent levy.

Or you may be eligible for subsidized coverage:

• A family of four with an income less than about $88,000 can get tax credits, on a sliding scale, to help them pay insurance premiums and deductibles.
• Health plans on exchanges can offer abortion coverage. But if they do, subscribers who get federal subsidies will have to make separate premium payments for the abortion coverage. States can also ban this coverage. >> TOP

If you are insured through your employer
You can keep your current plan — or — you can buy coverage through new state-run insurance marketplaces, called “exchanges,” starting in 2014.

If you keep your current plan:

• Within six months, the plans will have to stop some practices, like setting lifetime limits on coverage and canceling policy holders who get sick. They will also have to allow children to stay on their parents’ policies through age 26 and cover children with pre-existing conditions, but can still deny adults with medical problems until 2014.

Or you may be eligible to buy insurance through the exchanges:

• If your employer’s policy covers less than 60 percent of costs, or you are paying more than 9.5 percent of your income to get it, you can buy subsidized coverage on the exchanges.
• If you receive subsidies and enroll in a health plan that covers abortion, you will have to pay a separate premium for that coverage. And states could prohibit abortion coverage by these plans.
• You can get a voucher from your employer to buy insurance on the exchanges if your income is below $88,000 for a family of four, and your premiums cost between 8 percent and 9.8 percent of your income.  >> TOP

If you are insured and receive coverage from Medicare
You will pay less for preventive care and prescription drugs. Your benefits might change if you are insured through a private Medicare Advantage plan.

Preventive care: Medicare will pay for an annual checkup. And deductibles and co-payments for many preventive services and screenings will be eliminated.

Prescription drug coverage: The gap in coverage of prescription drugs, known as the “doughnut hole,” will be gradually filled by 2020. This year, consumers who hit the doughnut hole will receive a $250 rebate. Subsidies would be reduced for individuals making more than $85,000 or couples making more than $170,000.

Enrolled in Medicare Advantage: Subsidies for these plans run by insurance companies under contract with the government will be slashed substantially, leaving their 10 million beneficiaries with the prospect of higher premiums or reduced benefits.  >> TOP

If you are insured and receive coverage from Medicaid
You and your children can maintain eligibility and receive free preventive services.

Adults: States cannot cut people from Medicaid until the exchanges start operating in 2014, unless a state faces a budget shortfall. Many preventive services would be offered without cost.

Children: States cannot cut children from Medicaid or the Children’s Health Insurance Program until 2019. >> TOP

If you are uninsured, you can get coverage from a high-risk pool
If you are refused coverage because of your health, you can get insurance from a new high-risk pool.

The pool will be established within six months and will operate until 2014, when insurance companies can no longer refuse applicants with pre-existing health problems. Annual out-of-pocket medical costs will be capped at $5,950 for individuals and $11,900 for families.  >> TOP

If you are uninsured, you can get coverage through Medicaid
You can obtain coverage through Medicaid

Starting in 2014, anyone with an income below 133 percent of the poverty level — or about $29,327 in 2009 for a family of four — will be eligible for a rejuvenated Medicaid program. Medicaid’s often anemic reimbursements will be increased to the same level as Medicare, making more doctors willing to accept it.

If you are uninsured, you can get coverage from exchanges
If your employer does not cover you, and you make too much to qualify for Medicaid, you can buy from private insurers through exchanges starting in 2014.

• Coverage for those making up to four times the poverty threshold — $88,200 for a family of four in 2009 — will get subsidies on a sliding scale. That means you will pay somewhere between 3 percent and 9.5 percent of your income for insurance, and the government will cover the rest.
• Health plans will cover at least 60 percent of medical costs. Insurers will also have to offer more tiers that cover up to 90 percent of costs for additional premiums.
• Premiums of older people can be no more than three times as expensive as those of younger people.
• There will also be limits on overhead and profit. Insurers will be required to spend between 80 cents and 85 cents of every premium dollar on health care. They have been paying about 74 cents on average.
• Health plans on exchanges can offer abortion coverage. But if they do, subscribers who get federal subsidies will have to make separate premium payments for the coverage. States can prohibit abortion coverage.  >> TOP

If you do not buy insurance
Starting in 2014, most Americans will be required to buy health insurance or pay a penalty.

• The penalty will be phased in, starting at 1 percent of income in 2014, and rising to the maximum of $2,085 for a family in 2016.
• American Indians don’t have to buy insurance. Those with religious objections or a financial hardship can also avoid the requirement. And if you would pay more than 8 percent of your income for the cheapest available plan, you will not be penalized for failing to buy coverage.
• Those who are exempt, or under 30, can buy a policy that only pays for catastrophic medical costs. It must allow for three primary care visits a year as well.  >> TOP

This article, “How the Health Care Overhaul Could Affect You,” originally appeared in The New York Times.

Less than an hour after the House passed the reform bill, it passed a package of fixes in the form of a budget reconciliation bill. That vote was 220-211. The reconciliation bill will now go to the Senate. Senate leaders say they are likely to take it up later this week – perhaps as early as Tuesday. At this point there is no way to know if the process in the Senate will go fast or slow. Senate Majority Leader Harry Reid says he has the votes to move the bill quickly, but the Republicans may challenge whether some parts of it are appropriate for the reconciliation process.

The day was full of short speeches. The rules of the debate allowed each side just an hour of speaking about the bills at two different times, so most speakers were allotted between 45 seconds and two minutes of time.

Democrats generally talked about the importance of the vote they were about to take. Rep. John Dingell,
D-Mich., for example – “the dean of the House” – said it was “a day that’s going to rank with the day we approved civil rights in 1964.” House Whip James Clyburn, D-S.C., also called it “the civil rights act of the 21st Century.”

Republicans, on the other hand, focused on their concerns about cost and process. Rep. Mary Bono Mack, R-Calif., said the bill “does nothing to achieve real reform…The only things that are bipartisan tonight is opposition to this bill.” Rep. Paul Ryan, R-Wisc., said, “It’s unconscionable what we’re leaving the next generation.”

The debate concluded with longer speeches by Minority Leader John Boehner and Speaker Nancy Pelosi. Leader Boehner, R-Ohio, said he rose to speak “with a sad and heavy heart” because the bill should have been put together in a bipartisan fashion. He noted the weak economy and asked, “Is this really the time to raise taxes, create a new government bureaucracy, and create a burden on every job creator in the land?” He warned, “This is the people’s house. The moment the majority forgets it, the majority starts writing itself a ticket to minority status.”

Speaker Pelosi, D-Calif., was the last to talk before the vote. She said she spoke “with great humility and with great pride that we’ll make history for our country.” She acknowledged the President’s role and “his unwavering commitment to all Americans.” She talked about the Declaration of Independence’s guarantee of “life, liberty and the pursuit of happiness,” and said the health reform bill was “an American proposal that honors the traditions of our country.”

Meanwhile, the President was watching the House proceedings in the Roosevelt Room of the White House with Vice President Joe Biden and about 40 staff members. When the House vote reached 216 ayes – the number necessary to pass the bill – there were cheers and hugs in celebration. Later, the President came out to make a statement. He said, “In the end, this night represents another stone firmly laid in the foundation of the American dream.” He described the system we have now as “a system that works for insurance companies but not for the American people,” and said, “This will not fix everything that ails our health care system, but it moves us in the right direction.”

The Senate bill would:

• Mandate everyone must get insurance
• Result in about 30 million additional people becoming insured
• Subsidize coverage for people who can’t afford insurance; increase the number of people eligible
  for Medicaid
• Raise money to pay for these things through new fees, taxes and cuts to Medicare Advantage
• Change the payment formula for Medicare Advantage
• Make many changes in the way insurance companies operate, from saying they have to sell insurance to everyone, regardless of pre-existing conditions and health status, to selling insurance to individuals and small businesses through an exchange

The reconciliation bill, if it passes the Senate, would adjust many of those provisions and dates of enactment, although the broad strokes of the bill would remain the same.

The Kaiser Family Foundation has created a chart to compare the Senate bill and the reconciliation bill.
To see it, click here.

Most stories are describing the bill in largely favorable terms — and the vote as a triumph of the political system as a whole. The vote, reports USA Today (3/22, Wolf, Fritze), “assured that about 32 million Americans will gain health insurance coverage, and millions more will win protections against losing theirs.” The Los Angeles Times (3/22, Levey, Hook, Silva, Muskal) reports that “House Democratic leaders proved they could hold the majority caucus together,” though “thirty-four Democrats opposed the bill, as did all Republicans.” An AP (3/22, Woodward) story observes, “Rarely does the government, that big, clumsy, poorly regarded oaf, pull off anything short of war that touches all lives with one act, one stroke of a president’s pen. Such a moment has come.”

It was, Bloomberg News (3/22, Litvan, Rowley, Jensen) notes, “the most sweeping US healthcare legislation in four decades,” and “the biggest victory yet for…Obama.” The AP (3/22, Espo) notes that the President “watched the vote in the White House’s Roosevelt Room with Vice President Joe Biden and about 40 staff aides. When the long sought 216th vote came in — the magic number needed for passage — the room burst into applause and hugs. An exultant president exchanged a high-five with his chief of staff, Rahm Emanuel.”

The Hill (3/22, Swanson, subscription required) notes that the President addressed the nation saying, “Tonight, at a time when the pundits said it was no longer possible, we rose above the weight of our politics. … This is what change looks like.”

The Los Angeles Times (3/22, Nicholas) reports, “Rarely does a president bet everything on a single card, but…Obama did it on healthcare,” and “what became clear in the…debate is that Obama is a president with a combative stubbornness, one that was not often visible in his cool, above-the-fray public demeanor.”

In a front-page story, the New York Times (3/22, A1, Bernard) reports, “The uninsured are clearly the biggest beneficiaries of the legislation, which would extend the healthcare safety net for the lowest-income Americans.” Meanwhile, “for people already covered by a large employer — most Americans, in other words — the effect would not be as significant. And yet, just about everyone might benefit from tighter insurance regulations.” The Times adds, “There is no question that the legislation should benefit consumers in various ways.” In a separate front-page story, the New York Times (3/22, A1, Pear, Herszenhorn) notes that “Democrats hailed the vote as historic, comparable to the establishment of Medicare and Social Security and a long overdue step forward in social justice.”

McClatchy (3/22, Lightman, Douglas) says that “within a year, insurers” will “be barred from denying coverage to children because of pre-existing conditions, imposing lifetime limits on coverage and dropping people from coverage when they get sick.” The bill also “provides more help with insurance premiums for lower- and middle-income consumers and expands Medicaid funding to states.”

Battle Moves To Senate, Courts. Politico’s (3/22) Carrie Budoff Brown, in a blog entry, reports that “the Senate is preparing to take up the package of fixes to the Senate bill as early as Tuesday, according to Majority Leader Harry Reid’s spokesman, Jim Manley.” However, “Senate Democrats and Republicans still need to sit down together with the parliamentarian to review the list of potential items that could be subject to the Byrd Rule — a step that precedes the consideration of a reconciliation bill.”

The New York Times (3/22, A17, Zeleny, Stolberg), meanwhile, reports, “The next chapter in the healthcare fight will play out not only in the midterm elections, but also in the courts. Attorneys general in three states — Virginia, Florida and South Carolina — have indicated they will file legal challenges to the measure, on the grounds that it violates the Constitution by requiring individuals to purchase insurance.” In an interview, Virginia attorney general Ken Cuccinelli “said he intended to base his challenge on two grounds: that the federal bill conflicts with a newly passed state law that says no Virginian may be compelled to buy insurance and that Congress does not have authority to impose the mandate.” Meanwhile, “the White House and Democrats were preparing to counter the legal arguments and coordinate a state-by-state response to any prospective challenges.”

ABC World News (3/18, lead story, 3:40, Karl) noted that according to the CBO analysis, the bill will cost “$940 billion over ten years. It’s paid for with more than $400 billion in new taxes, including taxes on insurance companies, medical device manufacturers, and a hike in Medicare taxes for the wealthy. And more than $500 billion in cuts to Medicare spending, much of it to the Medicare advantage program, which pays for private insurance coverage for seniors. The net result? The deficit comes down by more than $130 billion over ten years.”

But, the Washington Times (3/19, Rowland) notes that “Republicans argued that the CBO analysis is only preliminary and also projects roughly $1 trillion in expanded entitlement spending.” Another Washington Times (3/19, Haberkorn) story also reports that “Republicans are skeptical that any reform plan this large could reduce the deficit and prompt savings.”

Under the headline “Fine-Tuning Led To Health Bill’s $940 Billion Price Tag,” the New York Times (3/19, A16, Herszenhorn) asks, “How did the numbers come out just right? Not by accident.” The Democratic Party “consulted repeatedly with its number-crunchers and the bipartisan staff of the Joint Committee on Taxation. In other words, the overall numbers were never going to miss the mark.” Politico (3/19, O’Connor, Brown) also reports, “Democrats wrangled for days with the CBO to get the numbers within their targets.”

In a front-page analysis, the Washington Post (3/19, A1, Irwin) notes that “as much as the 25-page ‘score’ of the legislation was treated as holy writ in Washington — Democrats eagerly flagged its conclusion that the package they aim to pass this weekend would cut the deficit by $138 billion over the coming decade — the reality is considerably messier.” The Post adds that CBO estimates are “more art than science, and although the forecasts that accompany legislation are always filled with uncertainty, this one contains more than most.”
Democrats Gain Ground In Effort For 216 Healthcare Votes.
Media reports on the House vote on healthcare reform generally portray the White House and Democratic leaders as gaining ground. Even as they caution that the tally remains fluid and the votes are not yet there for the President’s plan, the consensus in much of the coverage is that the bill will pass this weekend. The New York Times (3/19, Zeleny) reports that “with momentum steadily building to a Sunday vote, the party leaders are also beginning to decide which politically endangered lawmakers will be given absolution to vote no.” While “there are…very few votes to spare,” adds the Times, “there are some. And even most Republican leaders concede that the mystery is not so much whether Democrats will reach the magic number of 216, but rather whose names will be included as yes votes in the final count.”

ABC World News (3/18, lead story, 3:40, Karl) reported, “Just in the last few hours, we’ve had the Democrats pick up two critical yes votes, and lose one vote they thought they already had, so, here is where we are now. The magic number, of course, 216. Need it to pass or defeat the bill. And by count, we are already at 209 either no or leaning no. Democratic vote counters tell me they have at least 208 in the yes camp, leaving a maximum universe of 14 members who are undecided, and that is where the battle is now. … Democratic leaders still don’t have the votes they need, but there is no turning back now.” Politico (3/19, Lee) also reports that “House leaders say they’re still short of the 216 votes needed to pass reform in the House.”

USA Today (3/19, Wolf) reports that “several Democrats who voted against the House healthcare package in November said they would support the new version, including Reps. Betsy Markey of Colorado and Bart Gordon of Tennessee. The vote remained in doubt, however, as the number of undecided House Democrats grew shorter.” But overall, the Washington Times (3/19, Curl) reports, “on Thursday, Capitol Hill Democrats smiled. A lot.”

McClatchy (3/19, Lightman, Talev, Douglas) reports, “Though they appeared still short of the votes they need, House Democratic leaders were increasingly confident that they’ll triumph.” The AP (3/19, Espo) similarly reports that the votes are “not yet secured,” but Thursday, “support for the legislation appeared to be growing.”

The New York Times (3/19, A1, Pear, Herszenhorn), the Washington Post (3/19, Kane, Montgomery), the Washington Times (3/19, Weber), Politico (3/19, O’Connor), Bloomberg News (3/19, Litvan, Rowley), and the Wall Street Journal (3/19, Hitt, Adamy, subscription required) also cover the story.
Republicans Ponder Tactics To Derail Bill In The Senate.
The CBS Evening News (3/18, lead story, 4:15, Cordes) reported, “If the House passes the bill on Sunday, the Senate would take it up next week, but there Republicans have even more powerful stalling tactics at their disposal. … For starters, they’re technically allowed to offer unlimited amendments, and if even one of those amendments passes, then that changes the language of the bill, meaning the bill would have to go back to the House for another vote and that’s something the Democrats are desperate to avoid.”

Politico (3/19, Brown, Raju) reports that GOP senators “have been plotting for months to sentence it to a painful procedural death.” The Post adds that “under a strategy developed by Republican Policy Committee Chairman John Thune of South Dakota and Sen. Judd Gregg of New Hampshire, Republicans are plotting ways to strike major elements of the reconciliation bill, including changes to the special Medicaid deal for Nebraska and the carve-out for Florida senior citizens from Medicaid Advantage cuts. They are also going small bore, looking to strike seemingly minor provisions, including one that would fix language dealing with the employer mandate and the construction industry.” According to “one senior Republican aide…as much as 40 percent of the measure can be killed through procedural objections.”

Meanwhile, USA Today (3/19, Kiely) reports that “Democratic senators are working to assure House colleagues that the Republican strategy won’t work.”

Missouri Senate Approves Bill To Require Health Insurance Coverage For Autism Treatment.
The AP (3/19, Wire) reports that on March 18, “Missouri senators voted” 26 to 6 “to require some health insurance plans to cover treatment for autism.” Specifically, the measure “would require group insurance policies regulated by the state to provide up to $55,000 annually for behavioral treatment until age 21.” The AP adds that “increased premiums as a result of the autism insurance mandate are expected to cost Missouri $1.7 million for people on the state employee healthcare plan.”

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