There's been a lot of talk about the ban on pre-existing conditions for children going into effect immediately. That simply is not true, and never has been. Below I'll explain why.
There are four parts to banning discrimination by health status:
- Prohibiting insurers from writing pre-existing clauses (also known as prohibition of pre-existing clauses)
- Requiring insurers to accept everyone regardless of health status (also known as guaranteed issue underwriting)
- Requiring insurers to renew everyone so long as they are paying premiums and didn't intentionally commit fraud on their application (also known as guaranteed renewability)
- Prohibiting insurers from charging higher premiums because of health status (also known as a community rating)
Now under the current bill, the prohibition of pre-existing clauses for children clearly goes into effect immediately. If an insurer accepts an entire family, they cannot write clauses excluding the child's asthma, diabetes, or what have you.
What is in dispute is whether or not between now and 2014 the insurer is required to accept the child if he/she has a pre-existing condition. Clearly, Congress could pass a law clarifying the answer is yes.
But quite frankly, none of this really matters since it is crystal clear the legislation states that insurers can still price for the child's individual risk, slap the child with a pre-existing condition with a substandard rating, and price the child out of the individual insurance market. The prohibition of standard, substandard, preferred, super-preferred, gender, occupation, etc. ratings clearly does not begin until 2014. That is what the community rating does -- it charges one rate to everyone regardless of their circumstances.
And of course once all four of these items are in place, there has to be some mechanism to prevent healthy people from waiting until they get sick to purchase health insurance, causing prices to rise, the next healthiest group of people to drop out, causing prices to rise even more, and having prices spiral out of control. That is what the individual mandate tax penalty is designed to do. For insurance to work, those who don't use it have to subsidize those who do.
So let's quit doing cartwheels that we banned discrimination by health status for children immediately. We didn't. That doesn't go into effect until 2014 -- the same date it does for adults.