Major health insurance companies that serve Florida, Kansas, Oklahoma and other states no longer are offering plans specifically for children in response a requirement under the new health reform law that insurers cover children regardless of pre-existing conditions, according to National Association of Insurance Commissioners officials, The Hill's "Healthwatch" reports (Pecquet, "Healthwatch," The Hill, 7/25).
The final regulations for children's coverage are expected before Sept. 23 and insurers are required to provide coverage to all children that apply to new plans after that date (Alonso-Zaldivar, AP/Washington Post, 7/23).
Dropping Child-Only Plans
On Friday, at least three NAIC members -- Florida Insurance Commissioner Kevin McCarty, Kansas Insurance Commissioner Sandy Praeger and Oklahoma Insurance Commissioner Kim Holland -- said insurers in their states already have dropped child-only plans or have discussed the idea (Nussbaum, Bloomberg, 7/23).
The officials noted that insurers are not rescinding children's coverage that has already been issued, but they are ceasing to write new policies (AP/Washington Post, 7/23).
According to Holland, insurers have been using "medical underwriting," which has allowed them to craft low-cost plans for children that limit their expenses for costly medical care and make their expenses more predictable.
Changes Under Reform Law
However, under the new reform law, insurers are required to honor all applications for child-only coverage, and parents can sign up for the plans at any time, particularly when their children get sick. Parents then can stop payments when they no longer need coverage, which insurance industry officials say drives up medical costs and makes insurers' financial risk unmanageable (Reichard, CQ HealthBeat, 7/23).
Industry officials estimate that child-only policies account for 8% of single coverage plans that are sold directly to consumers, the AP/Post reports (AP/Washington Post, 7/23).
Federal Officials Criticize Insurers
"We're disappointed that a small number of insurance companies are taking this unwarranted and unnecessary step," HHS spokesperson Jennifer Santillo said, adding, "Helping all children get quality, affordable health insurance is a top priority. That is why we are working with the insurance industry to help ensure that quality coverage is available nationwide for children with pre-existing conditions" ("Healthwatch," The Hill, 7/25).
Open Enrollment Period Suggested as a Potential Solution
According to the AP/Post, insurers and state insurance commissioners have suggested implementing an open enrollment period for guaranteed children's coverage. Open enrollments, scheduled at specific times annually for most employer health plans, would guarantee coverage to children under specific conditions.
Holland said she believes such an approach is "fairly reasonable" because it would "create a mechanism to get children into coverage but limit the ability to misuse the system" (AP/Washington Post, 7/23).
NAIC officials said they are holding discussions with HHS officials about possible regulatory changes that would provide insurers with similar protections (CQ HealthBeat, 7/23).