Tuesday, October 19, 2010

a practical (and predictable) implication of trying to mandate child-only health insurance plans

From Patrick Howington in the C-J...

Health insurers summoned to the state capital Wednesday to explain why they were curtailing the sale of child-only policies said they could resume selling those plans — if the state required all their competitors to do the same....

The insurers laid out their positions at a hearing before Kentucky Insurance Commissioner Sharon Clark, saying they were curtailing sales of child-only plans in response to the new health reform law, which required insurers to begin accepting children with pre-existing medical conditions starting Sept. 23. Previously, insurers could refuse to cover sick children.

Insurers around the nation — including Louisville-based Humana and Anthem, Kentucky’s largest health insurer — responded by halting the sale of new child-only plans before the new provision took effect.

The move angered consumer advocates, who said it amounted to an end run around one of the reform law’s most prized consumer protections.

But the companies argued that sick children can still get coverage as part of new family policies. And insurers will continue to cover children who already have child-only policies — they just won’t write new ones.

The insurers were concerned that the law created an incentive for parents to wait until children were very sick before buying coverage, secure in the knowledge than an insurer couldn’t turn them down.

Once one insurer announced it was suspending child-only policies, the others followed suit, saying they could end up with so many chronically ill children that other customers’ premiums would be driven up....


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