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Life Health > Health Insurance > Health Insurance

Interested Parties Start To Read PPACA, Find Surprises (Updated)

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Insurer executives, congressional staffers, lobbyists, lawyers, consumer activists and others are starting to pore over the Patient Protection and Affordable Care Act of Congress and a sister measure.

The New York Times today ran an article about a conflict between insurance industry experts and Democratic policymakers over the precise meaning of a section dealing with health coverage for children with health problems.

William Schiffbauer, a Washington lawyer who represents health insurers and is quoted in the Times article and other articles about the conflict, says he believes that the contentious process that produced PPACA and H.R. 4872, the PPACA “fixer bill, means that the controversy over the child preexisting condition exclusion provision is just one of many worms that careful readers of the legislation will dig up.

In legislative language, “the change of a semicolon or a colon or a period can make a substantial difference,” Schiffbauer says — and PPACA and H.R. 4872 contain more than 2,000 pages of letters, numbers and punctuation marks.

In the Times article, Robert Pear writes about a PPACA provision that prohibits health insurers from imposing preexisting conditions exclusions on children.

America’s Health Insurance Plans, Washington, believes “the legislation that was enacted prohibits pre-existing condition exclusions for children starting in 6 months, and requires guaranteed coverage for children and adults starting in 2014,” according to AHIP spokesman Robert Zirkelbach.

Policymakers at consumer groups, on Capitol Hill, and in the Obama administration say health insurers are finding ambiguity where none exists.

Health insurers should stop searching for “non-existent loopholes,” U.S. Health and Human Secretary Kathleen Sebelius has written in a letter to Karen Ignagni, president of America’s Health Insurance Plans, Washington. “I am preparing to issue regulations in the weeks ahead ensuring that the term ‘pre-existing condition exclusion’ applies to both a child’s access to plan and to his or her benefits once he or she is in the plan.”

From insurers’ point of view, Schiffbauer says, the bill language bans preexisting exclusions for health plan enrollees under 19 years of age but says nothing about whether the ban applies to applicants for coverage, or the pricing of coverage for children under 19 years of age who have health problems.

AHIP is trying to dispel fears that health insurers are eager to use loopholes to avoid providing health coverage for sick children.

“We understand policymakers are contemplating changes to the provisions related to coverage for children, and we will implement any revisions that are made,” Zirkelbach says.

AHIP itself proposed more than a year ago that Congress put a ban on pre-existing condition exclusions, require insurers to sell health coverage on a guaranteed issue basis, and require all Americans to have health coverage, to keep people from gaming the system by waiting until they are sick to pay for health coverage.

But health insurers want to see the government apply clear-cut rules in a clear-cut way, Schiffbauer says.

Otherwise, if some insurers decide that they must insure children on a guaranteed issue basis, and others decide they can wait until 2014 to insure children on a guaranteed issue basis, the insurers that interpret PPACA in a generous fashion could suffer from adverse selection, Schiffbauer says.

Schiffbauer, one of a relatively small group of experts who specialize in digesting raw, complicated health insurance legislation, says the apparent ambiguity took awhile to get attention partly because the interested parties are just now starting to look at the actual PPACA language, rather than PPACA summaries.

PPACA has been around since Dec. 24, 2009, but few read it carefully, partly because no one knew whether a big health bill would become law, or whether a successful health bill would look more like the House heath bill, more like the Senate health bill, or like a combination, Schiffbauer says.

In addition, much of the debate about H.R. 3590, the bill that created PPACA, focused on issues such as whether President Obama was born in Kenya and whether the Democrats were imposing a socialist takeover of health care, rather than on efforts to identify and eliminate specific weaknesses in the bill.

“When you write a bill this complicated in such a rapid fashion, with a less-than-comprehensive review, obviously there are going to be things in there that are mistakes, or that are drafted in such a way that there will be unintended consequences,” says Jessica Waltman, a senior vice president at the National Association of Health Underwriters, Arlington, Va.

Drafters also obscured the meaning of some parts of the bill, by expressing some provisions in series of short, cryptic instructions to revise the Public Health Services Act or other acts. Most of the people who can understand those sections are health insurance lawyers who have PPACA open on one screen and the statutes being amended open on another screen, Schiffbauer says.

Schiffbauer found, for example, that PPACA makes many changes to the Public Health Service Act but says almost nothing about the Employee Retirement Income Security Act. But he also found one small, obscure PPACA page that creates ERISA Section 715. ERISA Section 715 states that all of the PPACA PHSA changes are now included in ERISA, meaning that those changes apply to large insured plans. PPACA excludes self-insured plans from a few of the new requirements, such as minimum medical loss ratio requirements, but most of the new requirements will also apply to self-insured plans, Schiffbauer says.

In theory, Democrats and Republicans in Congress could deal with the confusing parts of PPACA and parts that conflict with other laws by passing a technical corrections bill, but the chill in Republican-Democratic relations could keep members of Congress from cooperating on any legislation at least until after the November elections, Schiffbauer says.

In addition, members of Congress “have made the insurance industry such a villain, I don’t think they have any interest in what the industry has to say,” Schiffbauer says.

Meanwhile, many employers already are renewing existing health plans, or setting up new plans, and they need advice about how to implement PPACA — and reassurances that they will not be punished for unintentional violations of PPACA — soon, Waltman says.


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