Read the Bill 101

by Karoli on July 26, 2009 · 4 comments

in News, Tools

After spending my weekend tamping down fires around HR 3200 which were purely the result of a lack of understanding about how legislation is constructed, I thought it might be helpful to put together some pointers on how to read it, along with some key terms.


The bill is written in outline form. Because many provisions touch existing law (sweeping reform bills in particular), they are separated into divisions, titles and subtitles.

Each title outlines a specific area of focus. Each subtitle outlines specific provisions.

Within subtitles, there are sections. Each section addresses a very specific area of focus. For example, Division A, Title I, Subtitle A, Section 102 is an area that has been the subject of controversy. However, when read in the context of its specific focus it is not controversial at all. It breaks down as follows:

Division A = Affordable Health Care Choices
Title I = Protections and Standards for Qualified Health Benefits Plans
Subtitle A = General Standards
Section 102 = Protecting the choice to keep current coverage

Therefore, when reading page 16 of the bill (one of the sections which has been lifted out of context and widely misinterpreted), it must be read within the context of the division, title, subtitle and section to which it relates. In this case, it is written in the context of protecting choice to keep current coverage, and begins with a grandfather clause.

Key terms

  • Grandfather clause – (from Wikipedia) “an exception that allows an old rule to continue to apply to some existing situations, when a new rule will apply to all future situations.

    This is a key term which must be understood to interpret the meaning of Section 102(a) on page 16. Clearly the intent is to allow contracts currently in existence to continue for the length of the contract. Simply put, no one has to kill it. It can die a natural death.

  • Qualified versus Non-Qualified Plan

    A “Qualified” plan is a plan that meets specific requirements in order to receive favored status under another section of the law. In terms of health care reform, Qualified Health Benefits Plans will meet certain standards with regard to benefit levels, copayments, availability and cost.

    A “Non-Qualified” plan is a plan that is perfectly legal, but does not meet the requirements for Qualified Plans and will not be eligible for preferred treatment.

    Here is an easy example: A Qualified Health Benefits plan must have a premium rate structure that does not vary by any factors other than a small age variation ratio, area, or family enrollment. A Non-Qualified Health Benefits plan could have a different rate structure and be available for sale, but it will not receive favorable tax treatment or be considered an eligible plan for the Health Benefits Exchange.

Prohibitions and Exceptions

For every sweeping provision of a law, there is some reason to make an exception. For example, HR3200 requires that Providers may not also own hospitals. However, in rural areas where hospitals are few and far between, that provision could mean that people have to travel hundreds of miles to get to a hospital. To accommodate the situation, an exception was written (page 316) allowing providers to refer to provider owned hospitals as long as they agree to certain terms.

Again, this is standard language. Like the grandfather clause, it’s intended to preserve the status quo in situations where people would be harmed by the prohibition.


Any section may contain a cross-reference to another section. It’s critical that when a cross-reference exists, the reader check the referenced section for context and understanding of what the intent is. Often, cross-references are definitions which are key to understanding the intent of that particular section.

Example: On page 17, Section 102(b)(1)(A)refers to “the essential benefit package requirement under section 121.”

Section 121 begins on page 25 and very specifically outlines coverage requrements for exchange-participating and non-exchange-participating plans.

Cross-references are critical. If they’re ignored, the entire context of the section can be misconstrued.

In General

  1. Context, context, context – When reading, pay attention to the section description, and be careful not to extend the meaning of any particular paragraph beyond the context of that section focus.
  2. Keep notes as you read. There are lots of great PDF note-keeping tools (including Acrobat, but there are others as well). I use the bookmarking tools to annotate specific sections that either define or outline broad provisions. The advantage to taking notes is twofold. First, notes help to remember key points. Second, in a bill this large, they are top-level search hits which make it easy to get back to a section you may have left behind.
  3. Understand the lingo. Legislation has a language of its own. For example, much of the law is stated in the negative, like this:

    “A health plan shall NOT be a qualified health benefits plan UNLESS it contains the following provisions…”

    That’s paraphrased, but fairly typical and accurate for this type of legislation. Beware those negative statements. I try to rephrase them in the positive to test them, so in this case, I would read it as “A health plan must contain the following provisions to be a qualified health benefits plan…”

  4. Don’t get bogged down in amendments to existing law. In this bill, there are amendments to the Internal Revenue Code, Medicare laws, and other laws that touch the sides of this one. Some are key and critical, like the taxation of income above a certain threshhold. Others are amendments to ERISA, for example, and are repeated so they can be inserted into the relevant portions of the Internal Revenue Code relating to ERISA. I don’t recommend getting too bogged down there, since it’s likely to change when the House and Senate bills are reconciled and the compromise bill is reported out.

    Read for key changes and additions, because those are the heart of the bill and the heart of Congressional intent.

And of course, your questions are welcome in our comment section. If you’re reading and something doesn’t make sense, leave your question and we’ll work on getting an answer.

Disclaimer: I am not a lawyer, nor do I pretend to play one on TV, or even want to be one. However, I’ve spent over 25 years working with these laws, reading similar legislation relating to pension and profit sharing plans, and have a clear understanding of how they’re structured and how to read them.

Now…go read it (pdf). Show your representatives that if you can read the bill, they can read the bill. Ask questions, but be informed and accurate. Tossing inaccurate interpretations into the stream just weakens whatever arguments are to be made, when there are plenty of strong ones waiting for you.

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