Here's the start of the coming stories about private insurers finding and exploiting loopholes in the Senate health bill. One such loophole is the issue of insurance coverage for children with pre-existing conditions.Here's how this loophole in the bill works:
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 President Barack Obama signed into law Tuesday.
What that means is that the ban on pre-existing conditions for children apply to existing health insurance plans, and not to new insurance coverage plans. So a private insurer can simply write a new insurance plan that doesn't cover a child's pre-existing condition.
Thankfully the Obama administration is stepping in to correct this loophole. Here's more on this story below:
Late Tuesday, the administration said Health and Human Services Secretary Kathleen Sebelius would try to resolve the situation by issuing new regulations. The Obama administration interprets the law to mean that kids can't be denied coverage, as the president has said repeatedly.
"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 his or her benefits once he or she is in the plan for all plans newly sold in this country six months from today," HHS spokesman Nick Papas said.
And here's the statement from AHIP:
An insurance industry group says the language in the law that pertains to consumer protections for kids is difficult to parse.
"We're taking a closer look at it to see what exactly the requirement will be," said Robert Zirkelbach, spokesman for America's Health Insurance Plans, the main industry lobby.
Families also have a recourse with the high-risk pool which is supposed to be available 90 days from now, according to my recollection, if their children are turned down by a private insurer.
However, the Congressional Budget Office has estimated that funding for the high-risk pool, which is $5 billion, is slated to run out in 2011. This high-risk pool is supposed to exist until 2014, so a new infusion of funds will be needed for this program.
The Secretary of Health and Human Services is required to accept all applications to the high-risk pool until the $5 billion in funds are exhausted.
The proposal would permit the HHS secretary to stop accepting applications for the high-risk pool once it has exhausted the $5 billion the proposal would appropriate for the program and premiums no longer cover claims
Here's also more on the cap on out-of-pocket costs for families and individuals with pre-existing conditions in the high-risk pool:
The Senate's proposal would tie limits on out-of-pocket costs for coverage through the pool to similar limits for high-deductible plans linked to health care savings accounts -- currently, $5,950 for individuals and $11,900 for families. MRMIP caps out-of-pocket costs at $2,500 for individuals and $4,000 for families.
MRMIP is California's high-risk pool, so the cap out-of-pocket costs may be different for each state. What is clear is that the limits on out-of-pocket costs for coverage through the pool is higher than the limits in other states. There is no mention about how much the premiums would cost for an individual with a pre-existing condition or families who has a sick child or relative. I'm looking into this matter further, so if you have any other information on this, it would be helpful.
UPDATE: We're circulating our petition to Senators Nelson and Lincoln to do the right thing by voting for the reconciliation fix to the Senate health bill.