HR 3200, “America’s Affordable Health Choices Act of 2009”

17 Aug

Have you heard all the hoop-la about whether or not you’ll be able to keep your private insurance if this bill is passed.  President Obama says yes and he’s not lying…sort of.

Here’s where having been a Contract Negotiator and Contracting Officer for the United States Navy, and a Federal Employee, for over 25 years comes in awful handy.  Awful.

Let’s look at Section 102 of the proposed bill, which is titled “Protecting the Choice to Keep Current Coverage.”

The first paragraph of this Section (paragraph (a)) says your employment-based coverage can be considered to be acceptable insurance (and be “grandfathered” (stays in effect) if you had it on or before day one the bill goes into effect) if conditions are met regarding (1) new enrollments, (2) changes in terms or conditions, and (3) premium increases from that day forward.

This means that, if your plan is considered grandfathered by the Government (which conditions are discussed later in the Section (paragraph (b)—see below) and

(1) As long as your employer does not provide its employment-based insurance to any new employees hired after the bill goes into effect, your employment-based insurance stays in effect; however, if your employer does provide its employment-based insurance to a new employee, your insurance is NO LONGER grandfathered.  This is because the bill uses the language “does not” instead of “shall not,” which in effect does not prohibit new enrollments.  From a legal standpoint, the word “shall” (indicate determination, obligation or certainty) is acknowledged to be tantamount to an inarguable order; “may” (possibly, but not certainly), “can” (to be able to), “should” (ought), or any other form of prohibition does not have the same force or effect as they do not require action.  Similarly, the word “does” simply indicates the ability to perform or execute; it does not require performance or execution.  The good news, however, is that enrolling any dependents you may produce after the bill goes into effect shall not be affected, so your insurance will stay in effect under that circumstance.  Why “shall” is used in only the second half and not in any of the other “prohibitions” is, in my opinion, a legal loop-hole for employment-based insurance companies to bail out and force segments they no longer want into the private insurance pool.

(2) Unless directed by Law, and as long as your employment-based insurance does not change any of the terms or conditions of your contract, including increasing or decreasing your benefits or cost-sharing (i.e., copayments, coinsurance, etc.) after the bill goes into effect, your employment-based insurance stays in effect.  When was the last time your insurance didn’t either increase cost-sharing or decrease benefits?  Uh huh.

(3) As specified by the Commissioner, your employment-based insurance cannot increase your premium if you are in a specific risk group unless it raises the premium for everyone in that risk group.  This is a little better in terms of legality and protection for the consumer, but only in terms of requiring the insurer to spread out the pain.  And once again, if the insurer elects not to do so, it looses grandfather status.

Let us now look at the criteria your employment-based insurance must meet in order to become grandfathered by perusing paragraph (b) of Section 102.

They get five years to meet all the same requirements public insurance has to meet, which are outlined in the bill under the subtitles:

B. Standards Guaranteeing Access to Affordable Coverage
C. Standards Guaranteeing Access to Essential Benefits (most specifically
Coverage of Essential Benefits Package)
D. Additional Consumer Protections

But, whoops!  Won’t this require changes  to the terms or conditions of your contract?  Quite possibly.

For instance, if your plan has a pre-existing condition clause, deleting it will change the terms and conditions of your contract (Section 111 under Subtitle B specifies “A qualified health benefits plan may not impose any pre-existing condition exclusion…”).  Note the dreaded “may not;” they may or may not feel up to using this loop-hole.

Here’s another example:  If your plan does not have a yearly catastrophic maximum, adding one will change the terms and conditions of your contract (Section 122 paragraph (c)(2) under Subtitle C requires that “…cost-sharing incurred under the essential benefits package with respect to an individual (or family) for a year does not exceed…” the amounts specified in paragraph (c)(3)).  It’s another “does not,” but at least their “does not” loop-holes are consistent.

Technically (but perhaps not legally), this means the requirements of paragraph (2) above should not be met and, poof!  You may lose your current insurance and find yourself in the public insurance pool.  Note the use of “should not” and “may;” I can be just as wishy-washy as the best hackneyed bill drafter on the East coast.

So, that’s what loop-holes look like.  Not really the truth, not really a lie; a tiny black hole in space that may or may not be there, and if you know the secret and want to make the trip, you can get from here to there faster than light.  But as we all know, loop-holes are not built into laws for the use of the likes of you and me.

Isn’t contractual language analysis fun?!  That is what a bill or a law really is; a contract between the Government and the people it governs.  It would behoove us to know what we’re really buying.

Want to read the bill for yourself?  Click here.

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2 Responses to “HR 3200, “America’s Affordable Health Choices Act of 2009””

  1. Jackie Durkee August 27, 2009 at 9:40 AM #

    Great Post! I have heard some of this argument before, but I hadn’t thought about things like the 5 year requirement to meet heath benefit standards affecting the grandfathered plans in this way. I had heard the information about “shall” in my notary classes, but hadn’t paid attention to the wording where it is not used. I’m going to have to go back through some various parts to see if it has “shall” or not.
    Thanks.
    I’m reading and detailing what the bill actually says at FaithfulinPrayer.wordpress.com and it is encouraging to see some other people giving actual verifiable facts.

    • Faerie♥Kat August 27, 2009 at 12:52 PM #

      Hi Jackie

      That’s for dropping in!

      Fortunately or unfortunately, when dealing with the Law and legalities of any kind, like contractual obligations, every word and its meaning or lack of meaning comes into play. I once endured a lengthy battle over the definition of the term “below freezing.” The Government maintained the term meant temperatures below 32 degrees (and how I wish the person who had written the contract had just said “below 32 degrees!”), but the other party (who wanted more money and less stringent terms of an already awarded contract — one I didn’t write but was administering) insisted that wind chill, time of day, rate of cooling and a myriad of other condition had to be considered in determining when freezing occurred (and, of course, by their definition freezing occurred at a higher temperature than the Government definition). I finally had to resort to elementary text books to win my argument! When one has endure 30 years of Government contractors trying to squeeze through contractual loopholes, one learns very quickly to think carefully about every word chosen and the crafting of every phrase and every sentence. And it never hurt me to have almost completed an English degree before changing to my major to Business!

      Faerie blessings,

      ♥Kat

      —– Original Message —–

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