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HHS and Allies Unleash Their Defense of Consumer Protections in Health Care Law

By Jane Norman, CQ HealthBeat Associate Editor

January 18, 2011 -- Hours before the beginning of the repeal debate in the House, the Department of Health and Human Services (HHS) issued a new report zeroing in on one of the most popular elements of the health care law—its ban on insurance denials in the individual market for people with preexisting conditions.

It's one in a barrage of studies, press releases and other information rolled out by the Obama administration and allies to champion a law that's not likely to be undone in Congress but could suffer further in public opinion if no defense is mounted. "We need to keep our country moving forward, not going back," HHS Secretary Kathleen Sebelius said in a conference call with reporters that also featured people who were denied health insurance.

Sebelius characterized the repeal debate as an "opportunity" to explain the law anew to the country. And the secretary took a shot at House Republicans, saying the Congressional Budget Office (CBO) has found that repeal would increase the deficit.

"Yet the leadership has chosen to exempt themselves from their own rules that any vote taken needs to be paid for," she said. "The vote is going forward in spite of the fact this same group of leaders has declared the deficit to be one of their priorities."

Republicans have rejected the CBO estimate as founded on double-counting and incorrect assumptions.

Also, the influential seniors lobby AARP issued a letter saying its members and their families often are "unclear" on what's in the law but support provisions such as the ban on pre-existing conditions. "While we respect that there are those who do not support the ACA [Affordable Health Care Act], AARP opposes repeal because the new law includes many vital provisions important to older Americans and their children," AARP CEO A. Barry Rand said in the letter to Congress.

And two House Democratic authors of the law, Henry A. Waxman of California and Frank Pallone of New Jersey, issued their own detailed report showing how repeal would affect localities.

The HHS report warns that many Americans too young for Medicare have preexisting medical conditions that could limit their access to insurance if they have to buy it on their own. If the report's wider definition of "preexisting condition" is adopted—one that includes common ailments such as diabetes, asthma, high cholesterol and obesity—129 million people would be affected, or half of all non-elderly Americans, the report says.

"If you've ever been told by your doctor that you have a health condition, the last thing you want to hear is that your insurance company is limiting or denying your health coverage," Richard Sorian, assistant secretary at HHS for public affairs, wrote in a blog post about the report.

Who's Really Affected

But the HHS report also says 59 percent of Americans received health care coverage through their employer-sponsored group plans in 2009. Those plans generally cover preexisting conditions. While that's down from 68 percent in 2000 and includes plans that have lifetime limits or higher rates due to preexisting conditions, it still leaves a large number of workers for whom this issue is not entirely relevant.

That point was made by health insurers. "We have long agreed that the individual insurance market needs to be reformed, but this report significantly exaggerates the number of people whose coverage is impacted by pre-existing conditions," said Robert Zirkelbach of America's Health Insurance Plans (AHIP).

Zirkeblach said most people get their coverage through their employers, who do not take into account pre-existing conditions. And, he said, nine out of 10 Americans who apply for coverage in the individual market are offered a policy while many others are eligible for public programs such as Medicaid.

Nonetheless, knowing there's plenty of support in the polls for the ban and that many people fear losing their jobs and their coverage, it's likely Republicans will find a way to preserve the preexisting coverage protection in their own health care approach or risk a backlash from voters.

Sorian said in his blog post that by repealing the law, Republicans would be taking away Americans' peace of mind as well when it comes to health insurance. "Under the full range of policies in the Affordable Care Act to be in place by 2014, Americans living with preexisting conditions are free from discrimination and can get the health coverage they need at a price they can afford," he wrote. "And families are free from the worry of having their insurance cancelled or capped when a family member gets sick, or going broke because of the medical costs of an accident or disease."

Estimates Range from 50 Million to 129 Million

The report constructs two estimates of the number of individuals who would be affected by taking away the ban on preexisting conditions included in the law, effective in 2014 when a broad array of changes will take place in the insurance market.

If the only people included are those who have conditions that would commonly lead them to be rejected or forced to get policies with high premium rates from insurers in the individual market, about 50 million people are estimated to have with preexisting conditions. Those people are eligible for the state high-risk pools.

The second group, estimated to be 129 million, also takes in common health and mental health conditions such as arthritis, asthma, high cholesterol, hypertension and obesity that likely would result in automatic denials of coverage, an exclusion of the condition or higher premiums, according to insurer guidelines posted on the Internet, the report says.

Sebelius acknowledged in the call that it might have been confusing to include both widely variant numbers in a press release and "unfortunately the release is not as well written as it should have been."

Those with employer coverage are at risk as well, the report warns. It says that "as many as 82 million" people with employer-based coverage have preexisting conditions under the wider definition. That limits their ability to obtain coverage if they become self-employed, take a job with a company that doesn't offer insurance or get divorced or retire or move to a different state.

Even those currently in good health could face problems over time, the report adds. It cites a survey that found among people reporting very good or excellent health with no chronic conditions, 15 percent to 30 percent will develop a preexisting condition within the next eight years, depending on their age.

And the report takes aim at the large baby boomer population, reporting that 86 percent of those between the ages of 55 and 64 would fall into the wider definition of a preexisting condition.

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