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For all of the fuss about “big government” and about 2,000 page pieces of legislation, you might think there would be more pressure for legislators to take the simple route.
Not!
Take the provision in the Patient Protection and Affordable Care Act that extends care to dependents up to age 26.
HR 676 – the single payer legislation that is still before the House of Representatives – has this to say about eligibility:
All individuals residing in the United States (including any territory of the United States) are covered under the USNHI Program entitling them to a universal, best quality standard of care.
Compare that with language in the Patient Protection and Affordable Care Act (PPACA) regarding eligibility just for those young adults up to age 26 who are children of parents with employer sponsored health insurance.
SEC. 2714. EXTENSION OF DEPENDENT COVERAGE.
‘‘(a) IN GENERAL.—A group health plan and a health insurance issuer offering group or individual health insurance coverage that provides dependent coverage of children shall continue to make such coverage available for an adult child (who is not married) until the child turns 26 years of age. Nothing in this section shall require a health plan or a health insurance issuer described in the preceding sentence to make coverage available for a child of a child receiving dependent coverage.
‘‘(b) REGULATIONS.—The Secretary shall promulgate regulations to define the dependents to which coverage shall be made available under subsection (a).
‘‘(c) RULE OF CONSTRUCTION.—Nothing in this section shall be construed to modify the definition of ‘dependent’ as used in the Internal Revenue Code of 1986 with respect to the tax treatment of the cost of coverage.
And the regulations mentioned in 2714(b)? They are 67 pages.
What can you possible discuss in 67 pages? Well let me remind you that hair splitting is difficult business.
To be fair, the actual regulation part of these 67 pages is really only seven pages times three. The 67 pages include the interim final (don’t you love “interim final”?) regs for the Internal Revenue Service, the Health and Human Services and the Employee Benefit Security Administration.
What do the regs address?
Was the child previously covered? - Doesn’t matter
Was the child previously eligible for coverage? ? - Doesn’t matter
What is a dependent? – Consult IRS rules
Does a dependent need to be dependent? - No
What was that last one? A dependent does not need to be financially dependent, they only need to meet the family relationship test. They could be married, employed and have access to employer sponsored health insurance.
Married? Yes, the language quoted above in the PPACA was eliminated in the Health Care and Education Reconciliation Act of 2010.
What if the plan is “grandfathered”? ? - Almost doesn’t matter.
Does the dependent or parent pay more for this coverage? - In short, no. But that answer is less than precise.
When are these changes effective?
This is perhaps the most confusing part. The regs are fairly clear. The changes are effective the first day of the plan or policy year after September 23, 2010. For most people that means January 1, 2011.
Confusing?
It is the public perception that is confused. And justifiably so. Several insurers have announced different approaches to early implementation of these rules. What is an individual to think when the health insurer that provides their employer sponsored health insurance announces that will begin early implementation of the rules concerning coverage of dependents up to age 26.
That employer sponsored plan may be covered by state insurance regulations that also have jurisdiction. If it is regulated by ERISA, state regulations do not apply. If it is a government sponsored employee benefit plan, neither ERISA or state insurance regulations may apply.
Eight pages of these regulations describe “take up rates”. Of the 29.5 million young adults in the 19-25 age cohort, the rules are expected to extend coverage to 2.83 million people.
Meanwhile the rules have no effect on 9.5 million people in that age group because those 9.5 million young adults either have no parents or have no parents with employer sponsored health insurance.
Get the picture? 67 pages of rules to extend coverage to 8% of an age group that represents 10% of the US population. Sixty seven pages on how to cover less than one percent of the population.
Should I remind you that eight of those 67 pages are devoted to the Paperwork Reduction Act?
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