Insurers find loophole in health bill, say they don’t have to cover sick kids

[kpete]

Insurers find loophole in health bill, say they don’t have to cover sick kids

By Sahil Kapur
Monday, March 29th, 2010 -- 9:03 am

Insurers find loophole in health bill, say they dont have to cover sick kidsDemocrats said their health care legislation would provide greater medical security to those in need. But it appears to fall short on protecting arguably the most vulnerable demographic: sick children.

Insurance companies wasted no time after the bill was passed to unearth a loophole that allowed them to deny coverage to children with pre-existing illnesses for the next four years.

According to the New York Times, http://www.nytimes.com/2010/03/29/health/policy/29health.html?hp "Insurers agree that if they provide insurance for a child, they must cover pre-existing conditions. But, they say, the law does not require them to write insurance for the child and it does not guarantee the 'availability of coverage' for all until 2014."

"The fine print differs from the larger political message," William G. Schiffbauer, an attorney who represents insurance companies, told the Times. "If a company sells insurance, it will have to cover pre-existing conditions for children covered by the policy. But it does not have to sell to somebody with a pre-existing condition. And the insurer could increase premiums to cover the additional cost."

more:
http://rawstory.com/rs/2010/0329/guaranteed-coverage-sick-children-health-bill/

[rockymountaindem]

1. Nobody could have forseen the insurance companies would try to wriggle off the hook!

This was a big-time unknown unknown. Even all the smartest minds on earth combined could not have predicted this turn of events!

[jody]

7. You forgot the "sarcasm" tag. n/t

[Greyhound]

10. Thief!

ROTFL! I posted this in the other (locked) thread on this.

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=389&topic_id=8041241&mesg_id=8041547

:rofl:
:kick: & R

[kiva]

18. Thanks for the link. I've not been here much lately,

and that thread proves the reason - locked because of general attacks against other DUers; those "attacks" were nothing compared to what I've seen from the HCR supporters.

[Greyhound]

19. There's a definite slant, but it's still fun to yank their chains and hear them squeal.

If we stop laughing, we'll end up crying. Watching this slow-motion train wreck happen is the most entertaining thing in America now. Those of us being screwed by this again are pretty much used to it, having lived most of our lives on Grayson's "Republicon health care plan".

[HereSince1628]

2. Or perhaps they just revealled a Trojan horse

That was put in there when the insurance industry wrote the model the bill was based on. :(

[optimator]

3. its not a loophole since it was designed

these demons WROTE the damn bill.
This is just the beginning...

[Romulox]

4. "I am a scorpion; it's my nature." nt

[formercia]

11. Poor Mr. Frog

That story was recounted to me by the chargé d'affaires in Port Suez Egypt in May 1967, just before the June War. He didn't realize what a prophetic story it was, at the time.

[Jim__]

5. One more example of why we need single-payer.

We don't need these assholes trying to suck profits out of our health-care system.

[Leopolds Ghost]

6. It'll all be fixed in reconciliation. But before that happens, Congress has important work to do

"...like... PLAY WITH MY BALLS!"

[Qutzupalotl]

8. Gotta fix this, pronto.

[Triana]

9. This is why the for-profit insurers should have been left OUT of the bill...

....and shut down and shut out in favor of single-payer. There you go.

[Raineyb]

13. Hello! You're exactly right. n/t

[walldude]

12. I'm glad you posted this and not someone else...

This has been talked about since the day the bill passed. I believe it was called "MORE RIGHT WING LIES" and "HATERS MAKING STUFF UP" when I posted it last week.

I have laid off the bill, not wanting to rain on anyone's parade but, now that things are settling down, the Dems can use their new found balls to FIX THIS PIECE OF SHIT!

[Warren Stupidity]

14. Obama has already indicated that an E.O will clarify the regulation.

[Yo_Mama]

15. He can't

Seriously, this is unconstitutional. The bill does not say that children have to be accepted. It says that there can't be any pre-existing condition exclusion IN COVERAGE. The insurance companies will have to cover all conditions for children in group insurance, but the insurance companies can deny coverage altogether and can charge enough to cover the extra cost. This puts small companies, small groups and families buying coverage individually in a very poor position. An insurer could refuse to write coverage or could simply charge an astronomical amount. The end result of this bill is that many children will lose coverage they now have.

Under constitutional law, the Executive (regulators) can't exercise authority not delegated to them by Congress, and that includes the President. If the regulators write regs to require the insurance companies to cover all children, the insurance companies will sue and will win.

Congress did this, not the president. Congress needs to fix it. The president can't. Contact your senators and congressional representatives and tell them to do it. I am firing all of mine; not one of them even responded when I sent emails about this and other provisions.

This is what happens when the bills are not posted and discussed.

[kestrel91316]

17. The bill WAS posted online. I saw it myself and read parts of it

(though the boring boilerplate aversion won out in the end).

[Yo_Mama]

21. The senate version was

but it would appear that most of the House never knew what they were voting for.

[Warren Stupidity]

20. yeah he can. he can interpret implementation and administration

by the executive in just about any way he wants, by executive order, and with 200+ years of precedent for doing so. It would then be up to the courts to determine that this was not the intent of Congress, when it clearly was.

[Yo_Mama]

22. No, he can't

He can try (or HHS can try) but this can only succeed when the language of the law is ambiguous. And this one is not. There are plenty of court cases knocking down regulators who have tried to do this sort of thing. They always back down in enforcement when its contrary to the language of the law, because they lose. I've done it myself. You never even get to court.

I'm not writing this to score a point off you or to upset anyone. I'm trying to let people know that they have to contact Congress to get this changed. I believe President Obama would change it if he could, but it will not survive a court challenge. And let's face it, insurers have plenty of lawyers.

Here's the language in the bill moving up implementation for children:
(e) Section 1253 of this Act is amended insert before
15 the period the following: ‘‘, except that—
16 ‘‘(1) section 1251 shall take effect on the date of
17 enactment of this Act; and
18 ‘‘(2) the provisions of section 2704 of the Public
19 Health Service Act (as amended by section 1201), as
20 they apply to enrollees who are under 19 years of age,
21 shall become effective for plan years beginning on or
22 after the date that is 6 months after the date of enact
23 ment of this Act.’’.

Now here's section 2704:
1 (1) in section 2704 (42 U.S.C. 300gg), as so re
2 designated by section 1201(2)—
3 (A) in subsection (c)—
4 (i) in paragraph (2), by striking
5 ‘‘group health plan’’ each place that such
6 term appears and inserting ‘‘group or indi7
vidual health plan’’; and
8 (ii) in paragraph (3)—
9 (I) by striking ‘‘group health in
10 surance’’ each place that such term ap
11 pears and inserting ‘‘group or indi
12 vidual health insurance’’; and
13 (II) in subparagraph (D), by
14 striking ‘‘small or large’’ and inserting
15 ‘‘individual or group’’;
16 (B) in subsection (d), by striking ‘‘group
17 health insurance’’ each place that such term ap18
pears and inserting ‘‘group or individual health
19 insurance’’; and
20 (C) in subsection (e)(1)(A), by striking
21 ‘‘group health insurance’’ and inserting ‘‘group
22 or individual health insurance’’;
23 (2) by striking the second heading for subpart 2
24 of part A (relating to other requirements);

So section 2704 modifies 42 USC 300gg. Here's a link to that:
http://www.law.cornell.edu/uscode/42/usc_sec_42_00000300--gg000-.html

And here's the title:
§ 300gg. Increased portability through limitation on preexisting condition exclusions

(a) Limitation on preexisting condition exclusion period; crediting for periods of previous coverage

Okay, it is not until you get to 300gg-11 that we get to enrollment provisions, and that's in subpart 3:
http://www.law.cornell.edu/uscode/42/usc_sec_42_00000300--gg011-.html
§ 300gg–11. Guaranteed availability of coverage for employers in group market

The bill does modify this section, but it does it in another place - in section 2731
1 (8) in section 2731 (42 U.S.C. 300gg–11), as so
2 redesignated by section 1001(3)—
3 (A) by striking the section heading and all
4 that follows through subsection (b);


So, the net result is that it is completely clear that the September implementation date only applies to exclusions in coverage and not guaranteed coverage.

[Xithras]

23. Actually, even "intent" may not be enough.

When Congress writes a law, the executive may issue interpretations on the law and select how they want to enforce it, but there is a legal line between interpretation and extension. The Executive cannot use its powers to extend the scope, reach, or language of a law drafted by Congress, but can merely "interpret" it.

Even the courts have somewhat limited powers in this circumstance, and can only offer "interpretations" based on Congressional intent, according to the original language of the law.

None of that undermines the original point though. If there is no actual language within the law declaring that the coverage must be extended, then there's nothing to interpret. Any Executive or Judicial interference would ultimately be judged as "extending" the law, which is unconstitutional. Only Congress can expand the scope of a law it passed.

[Warren Stupidity]

24. I simply disagree with both of you.

Until the 1950s, there were no rules or guidelines outlining what the president could or could not do through an Executive Order. However, the Supreme Court ruled in Youngstown Sheet & Tube Co. v. Sawyer, 343 US 579 (1952) that Executive Order 10340 from President Harry S. Truman placing all steel mills in the country under federal control was invalid because it attempted to make law, rather than clarify or act to further a law put forth by the Congress or the Constitution. Presidents since this decision have generally been careful to cite which specific laws they are acting under when issuing new Executive Orders.

...

Legal conflicts
To date, U.S. courts have overturned only two executive orders: the aforementioned Truman order, and a 1996 order issued by President Clinton that attempted to prevent the U.S. government from contracting with organizations that had strike-breakers on the payroll.<6> Congress may overturn an executive order by passing legislation in conflict with it or by refusing to approve funding to enforce it. In the former, the president retains the power to veto such a decision; however, the Congress may override a veto with a two-thirds majority to end an executive order. It has been argued that a Congressional override of an executive order is a nearly impossible event due to the supermajority vote required and the fact that such a vote leaves individual lawmakers very vulnerable to political criticism.<7>

http://en.wikipedia.org/wiki/Executive_order_(United_States)

Obama has broad power here to interpret and extend this law. The USSC would be in nearly unprecedented territory to interfere where an EO is specific to existing legislation and the interpretation thereof. Congress could intervene, as it could have with Bush who tested the boundaries here frequently, but hardly ever chooses to do so.

[Yo_Mama]

25. You have the right to disagree

But legally, you are wrong. And it is worth noting that HHS is going to write regulations on this. President Obama taught constitutional law at a university for a while - he isn't going to get himself on the wrong side of this.

The president has specific powers granted in the Constitution of his own, but most of the Executive power is derived from his mandate to execute the laws. If the law were unclear, regulations could certainly clarify it and the president could certainly direct HHS to issue those regulations. But the law isn't unclear on this point at all, and I cited why above.

The president does not have the power to make law by regulation or by executive order under the Constitution. Since you like Wiki, here's an article on presidential powers:
http://en.wikipedia.org/wiki/President_of_the_United_States#Article_II_executive_powers\
The president possesses the ability to direct much of the executive branch through executive orders. To the extent the orders are grounded in federal statute or executive power granted in the U.S. Constitution, these orders have the force of law. Thus, executive orders are reviewable by federal courts or can be rendered null through legislative changes to statute.

Executive orders are rarely overturned because they usually are issued quite properly under the Constitution. And there has accumulated quite a body of case law about executive powers. Most recently some of the notable cases pursuant to the AUMF. However the most direct SC precedent in this situation is Clinton V City of New York (line item veto):
http://caselaw.lp.findlaw.com/scripts/getcase.pl?court=us&vol=000&invol=97-1374
I quote:
Thus, in both legal and practical effect, the presidential actions at issue have amended two Acts of Congress by repealing a portion of each. Statutory repeals must conform with Art. I, INS v. Chadha, 462 U.S. 919, 954 , but there is no constitutional authorization for the President to amend or repeal.
...
Second, the contention that the cancellation authority is no greater than the President's traditional statutory authority to decline to spend appropriated funds or to implement specified tax measures fails because this Act, unlike the earlier laws, gives the President the unilateral power to change the text of duly enacted statutes.

Because this act very specifically lays out dates of implementation, there is no question of vagueness. The Executive would be amending this bill, which is an act that can only be done by Congress.

Nor is the claim that this wasn't Congress' intent even plausible. Right after the bill was signed AP quoted two congressional staffers saying the same thing that the insurers are saying:
http://www.google.com/hostednews/ap/article/ALeqM5jYnajhWrPEXihcCrpRNfUKN7rN-AD9EKTKIG0
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.

However, if a child is accepted for coverage, or is already covered, the insurer cannot exclude payment for treating a particular illness, as sometimes happens now. For example, if a child has asthma, the insurance company cannot write a policy that excludes that condition from coverage. The new safeguard will be in place later this year.

Full protection for children would not come until 2014, said Kate Cyrul, a spokeswoman for the Senate Health, Education, Labor and Pensions Committee, another panel that authored the legislation.

[Warren Stupidity]

26. Sebelius disagrees. But what would she know?

This afternoon, Secretary of Health and Human Services Kathleen Sebelius sent a letter (pdf) to Karen Ignagni, head of the insurers trade association, saying, essentially, are you sure you want to try this?

In the letter, Sebelius says that she will issue regulations clarifying that the law says children cannot be denied access to their parents' plan and that the plan cannot exclude coverage for their preexisting conditions. "I urge you to share this information with your members," Sebelius says, "and to help ensure they cease any attempt to deny coverage to some of the youngest and most vulnerable Americans."

http://voices.washingtonpost.com/ezra-klein/2010/03/sebelius_to_insurers_make_my_d.html

Interpreting existing law is not 'making new law' unless you are an insurance company trying to weasel out of your new obligations. Congress's intent is a matter of debate until Congress intervenes by clarifying the matter with new legislation contradicting the administration's interpretation, and that is entirely unlikely.

[Uncle Joe]

16. The pursuit of profit dynamic motivating the

"health" insurance industry will not cease with their take on this loophole, many more will follow.

So long as a for profit "health" insurance industry exists, there will be an eternal struggle to screw the American People out of their money and decent coverage, while driving medical costs up.

I also believe the arbitrary abandonment of non-profit universal coverage for every American and the passage of this HCR Law mandating the purchase of the for profit "health" insurance corporations' product without a strong national public option will only increase this repugnant industry's grip on any future Congress.

As the population of the U.S. grows so will the number of people mandated to purchase, thus the pool of profit available for bribing or lobbying the Congress and advertising or commercial money to buy off the corporate media will increase.

With the recent Supreme Court ruling allowing unlimited corporate advocacy, the sky is the limit for the for profit "health" insurance corporations domination over "We the People's" government and the American People.

I see this law as a Trojan Horse travesty.

Thanks for the thread, kpete.