Obama adminstration moves to fix kids coverage gap

WASHINGTON DC

It remained unclear if the sternly worded letter from Health and Human Services Secretary Kathleen Sebelius would settle a dispute over a widely touted achievement of the health care law that Obama signed last week.

The fine print of the law appears to have been less than completely clear on whether kids with health problems are guaranteed coverage starting this year. If there's a problem, some parents and their children may have to wait a long time: The legislation's broad ban on denying coverage to any person on account of a health condition doesn't take effect until 2014.

The sticking point is that the immediate benefit for children may not be as sweeping as Obama has claimed in extolling the legislation.

That's because the law can also be read to mean that if an insurance company accepts a particular child, it cannot write a policy for a child that excludes coverage for a given condition. For example, if the child has asthma, the insurer cannot exclude inhalers and respiratory care from coverage, as sometimes happens now.

But the company could still turn down the child altogether.

"The industry seems to be saying, 'You didn't write it the way you meant it'; the government is saying, 'Yes, we did,' " said health policy consultant Robert Laszewski, a former insurance executive. "Now we need to see what the industry does. Is the industry going to fight this? It would create some real public relations problems."

In a letter to the main industry trade group, Sebelius attempted to remove any doubt.

"Health insurance reform is designed to prevent any child from being denied coverage because he or she has a pre-existing condition," she wrote America's Health Insurance Plans. "Now is not the time to search for nonexistent loopholes that preserve a broken system."

Sebelius specified that children with a pre-existing medical problem may not be denied access to their parents' coverage under the new law. Furthermore, insurers will not be able to insure a child but exclude treatments for a particular medical problem.

"The term 'pre-existing condition exclusion' applies to both a child's access to a plan and his or her benefits once he or she is in the plan," Sebelius wrote, adding that her department will shortly issue a regulation to that effect. The new protections will be available starting in September, she said.

There was no immediate public response from the industry group.

Obama has conveyed the impression that the law provides ironclad protection.

"Starting this year, insurance companies will be banned forever from denying coverage to children with pre-existing conditions," the president said in a recent speech at George Mason University in Virginia.

But House and Senate staffers on two committees that wrote the legislation said it stopped short of a full guarantee. House leaders later issued a statement saying their intent was to broadly require coverage for kids with medical problems.