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Sebelius to insurers: Make my day

sebeliusshadow.JPG

The health-care story of the day is that insurers think they've found a way to get around getting around Congress's intent to ban preexisting condition discrimination for children. Details here. 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."

The politics -- and policy -- of this fight will be interesting. For the Republicans, this is a good issue in that it makes the bill look shoddily written. "If they can’t get these two things right," Sen. Mitch McConnell asked in his weekly radio address, "how can we expect them to properly manage the rest of it?"

Oddly, this is also a good issue for the Democrats. Why? Well, it lets them pick a fight with insurers who are trying to deny health-care coverage to sick little kids. Ignagni might as well kick an endangered puppy-panda hybrid in the face. On national television. While rooting for Duke to win the NCAA tournament.

The losers here are actually the insurers. As far as I can tell, their reading of the law is legitimate. And they have a lot to lose from a fight with the administration. It's not obvious that Sebelius actually can change this with a stroke of her pen, but there are plenty of other things she can do with a stroke of her pen that will make the insurance industry's life very, very difficult. And since this policy actually isn't a very big deal -- fairly few kids are uninsured because their preexisting conditions are keeping them off their parents' plan -- I'd guess that the administration and the insurers reach some sort of accord on this.

Photo credit: Ricky Carioti/The Washington Post.

By Ezra Klein  |  March 29, 2010; 6:12 PM ET
Categories:  Health Reform  
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Comments

If she actually has this authority, why didn't she exercise it a year ago? And if she has this authority, why is she exercising it only as to kids, and not for adults?

Posted by: tomtildrum | March 29, 2010 6:28 PM | Report abuse

"As far as I can tell, their reading of the law is legitimate. [...] It's not obvious that Sebelius actually can change this with a stroke of her pen, but there are plenty of other things she can do with a stroke of her pen that will make the insurance industry's life very, very difficult."

Exactly! Sebelius's letter offers additional ammunition to the (now) fifteen states and 4,200 businesses formally alleging coercion by the Administration. If a Secretary now claims the power to expand the scope of the legislation beyond its plain language -- and exerts that power to influence business activities -- how is anyone supposed to know what the already muddy legislation means and how can any business which opposes the Administration's political position operate successfully?

This is the tip of a huge iceberg.

Posted by: rmgregory | March 29, 2010 6:48 PM | Report abuse

That strikes me as a really excellent question by rmgregory. Ezra, now that you’re a “journalist”working for a "newspaper/gossip" sheet you could maybe call somebody at HHS or the White House and ask that question?

Posted by: MitchGuthman | March 29, 2010 6:52 PM | Report abuse

The idea here is that courts will defer to the reasonable interpretation of a statute by an agency entrusted to enforce that statute (so-called "Chevron" deference). So HHS didn't have the authority to interpret ACA a year ago because, obviously. ACA didn't exist a year ago.

Chevron deference only goes so far, however, and the courts won't defer to an interpretation at odds with the plain meaning of the statute. Not sure that HHS is really going to win this fight.

Posted by: gedwards1 | March 29, 2010 6:52 PM | Report abuse

"If she actually has this authority, why didn't she exercise it a year ago? And if she has this authority, why is she exercising it only as to kids, and not for adults?"

I'm pretty sure it's an authority granted by a law passed this week.

Posted by: y2josh_us | March 29, 2010 6:55 PM | Report abuse

During the various stages of HCR and things like SCHIP, prominent conservative thinkers, bloggers, radio hosts, etc. have gone after sick children or children of the sick. Think Marcelas Owens and Graham Frost. I wouldn't be surprised if enough conservatives out there messed this up for the GOP by siding against sick children. The sad state of politics in the US is that even something deemed as universally good as "helping sick children" is not above partisanship for the GOP, and if the Dems are for it, they'll be against it. Or at least, they've shown a tendency for that in the past by attacking 11 year olds on numerous occasions over health care topics.

Posted by: nylund | March 29, 2010 6:56 PM | Report abuse

The House should pass a clarifying fix to this bill and send it to the Senate. I would dare the Republicans to filibuster this measure.

Posted by: marvyT | March 29, 2010 7:01 PM | Report abuse

"the courts won't defer to an interpretation at odds with the plain meaning of the statute"

The way statutes are written nowadays, I'm not sure they generally have plain meanings. Does Ezra, or anyone reading this, have a link to the language in the act that is at issue here?

Posted by: thehersch | March 29, 2010 7:23 PM | Report abuse

For reference, the fifteenth state to join the PPACA litigation is Indiana, according to Associated Press reports (for example, http://cbs4.com/wireapnewsfl/Ind.joins.13.2.1598140.html ). Fourteen are following Florida's lead, with Virginia pursuing separate litigation.

Posted by: rmgregory | March 29, 2010 7:23 PM | Report abuse

OMG Ezra, are you actually admitting that the poster child for reform is actually a rare bird: "fairly few kids are uninsured because their preexisting conditions are keeping them off their parents' plan." The bill passes, the truth comes out.

Posted by: bmull | March 29, 2010 8:18 PM | Report abuse

--"[I]t makes the bill look shoddily written."--

The bill was despotically written. It's shoddy in its foundations.

Posted by: msoja | March 29, 2010 8:30 PM | Report abuse

What it comes down to it people on here aren't paying attention. It comes down to vague language and one insurers interpretation vs anothers. If insurer x does cover them and insurer y does not then insurer x is at a competitive disadvantage. Insurers know this but they get the dems to look stupid in the process and hopefully get it clarified

Posted by: visionbrkr | March 29, 2010 9:24 PM | Report abuse

Pretty much the only competition that seems to exist in the health insurance industry is the competition to see who can most shortsightedly act like greedy scumbags, thus ruining the system. I don't think an accord will be reached with the administration because it's only going to take one company to ruin that accord. After all, the first axiom of free markets is that if any party can take an advantage at the expense of their competitors, all the competitors will do so. This is supposed to work in a beneficial way, but it will obviously work in a malign way as well.

Posted by: theamazingjex | March 29, 2010 10:32 PM | Report abuse

I am really sick of Duke being made the scapegoat. Just because you live in DC and the twerps and sweaty Gary can't get it done is no reason to hate on a program that does.

Posted by: damonchild | March 29, 2010 10:55 PM | Report abuse

"It comes down to vague language and one insurers interpretation vs anothers."

Can you quote the language you characterize as vague? Thanks.

Posted by: thehersch | March 29, 2010 10:56 PM | Report abuse

If the bill had let them price the risk, you wouldn't have this issue.

Posted by: staticvars | March 29, 2010 11:31 PM | Report abuse

The insurance industry admits that the language is ambiguous. However, in the court of law, when language is deemed ambiguous, the intention of the law is then read (going back to when the bill was enacted). Ultimately the insurance industry will lose this one.

Furthermore, Republicans should be careful about this too. The reason that the issue even exists is because the reconciliation bill was meant to jump-start the end to preexisting condition discrimination for children. (This is obviously only until 2014 when the rest comes into effect.) The Republicans were just as able to change the language of the reconciliation bill, but made no such argument -- therefore, it can be assumed that the ambiguity passed by them as well.

Posted by: elt28 | March 29, 2010 11:57 PM | Report abuse

I admit that I will be rooting for Duke to beat West Virginia. It's easy to resent a winning program, but easier to resent Bob Huggins.

Posted by: jeffwacker | March 30, 2010 12:03 AM | Report abuse

Accord Schmaccord. I want a new bill addressing only this issue. Republicans will enjoy saying that the 2 existing bills are poorly written but would they dare filibuster ?


Can they keep the tea partiers happy while amending a law they claim they will repeal ? I think we can count on one Republican at least to delay changing this.

I smell votes in that drafting mistake.

Posted by: rjw88 | March 30, 2010 12:12 AM | Report abuse

Perhaps intent clarification needs to be made about Pharmacies deal of discounting drugs through the 'donut hole.' There is nothing in the language that prevents them from inflating prices. Kind of like going to a 50% off sale but everything is twice as much as other stores.

Posted by: NorthMan | March 30, 2010 12:46 AM | Report abuse

Well, well, well. Now we see why Obama and the Democratic Party were being so stupid when they dealt away the public option to the corporations. To hell with the public option and all its promise to truly help the people, eh? To hell with the people wanting to be free of the corporations, eh? Give the corporations what they want, which is guaranteed business forever with this individual mandate to buy whatever they sell no matter how bad it is and no public option way out, eh? Stupid, stupid, stupid. And Obama and the Democratic Party think that those who want freedom from such corporate raping, those many voters who actually turned out to vote in 2008 for such freedom, are going to turn out to vote in 2010 and 2012 after being so betrayed? Obama and the Democratic Party, in spite of their claims, have yet to heed The Message of Massachusetts, which is to kick the corporations out the door, and therefore finally meet the needs of the people.

Posted by: Keefanda | March 30, 2010 4:57 AM | Report abuse

So, not only did Congress not bother to read the bill or require an normal vote to pass it, they forgot to tell the President what was amd wasn't in thw bill. And now they are planning on enforcing things that aren't even in the bill? Somehow they managed to be specific about taxes on tanning salons and new rules for student loans but no clear "kids with pre-existing conditions" language in the bill? Why bother writing a bill at all, lets just let dictator Obama and Sebelious rule by personal whim and mandate. (?!?!)

Posted by: sam38 | March 30, 2010 5:11 AM | Report abuse

Whats in the bill? who knows? This is why unemployment is high employers must budget before expansion.Our fearless leader is printing money.We could help the insurance companies cover everyone by allowing them to print money as needed.But of course this bill is the start of the destruction of the insurance company.Fine by me I don't work for one.But they do perform a service assigning risk.One day healthcare will be political in nature.That works well?Like the federal takeover of education has doomed generations of black americans to poverty and family destruction.Oh not to forget obesity....

Posted by: jmounday | March 30, 2010 7:42 AM | Report abuse

Sebelious couldn't even pay her own taxes.

However, she is now the self-appointed guru of healthcare and the associated interpretations? The all-knowing, omnipotent ruler elite?

Yeah! LOL!!!

Posted by: tjmlrc | March 30, 2010 8:13 AM | Report abuse

Well, if this isn't a revealing post. "As far as I can tell, their reading of the law is legitimate.... It's not obvious that Sebelius actually can change this with a stroke of her pen, but there are plenty of other things she can do with a stroke of her pen that will make the insurance industry's life very, very difficult."

In short, you believe in the rule of men, and not of law. Good to know.

Posted by: ostap666 | March 30, 2010 8:36 AM | Report abuse

It's interesting how mainstream media, the propaganda machine of the Obama administration, can spin a story to make an entire industry look bad in order to try save few votes this November.

Spokesperson of the two committees that authored the legislation, both Democratic party controlled, interpretted the legislation for the health insurance industry.

Karen Lightfoot, spokeswoman for the House Energy and Commerce Committee, said "Under the new law, insurance companies still would be able to refuse new coverage to children because of a pre-existing medical problem."

And Kate Cyrul, a spokeswoman for the Senate Health, Education, Labor and Pensions Committee, said "Full protection for children would not come until 2014."

If anything this embarrassing situation proves that neither Obama or Sebelius read the bill and are quick to pass blame on other people.

Posted by: NorthMan | March 30, 2010 3:16 PM | Report abuse

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