Major insurers to drop child policies ahead of coverage mandate
Just days away from the implementation of new rules that will prevent insurers from denying coverage to children with pre-existing conditions, numerous major insurers have opted to end the sale of child-only policies.
Anthem Blue Cross and associate WellPoint, Aetna Inc., Cigna Inc., CoventryOne and others have been making under-the-radar announcements about their child health offerings in recent days, drawing sharp criticism from Democrats and progressive activists who championed the president’s health care reform agenda.
Insurers say the government’s mandate to extend coverage to children with pre-existing conditions could endanger their obligations to other policy holders — essentially blaming the Obama administration for their actions.
Child-only policies that have already been issued will still be honored, they claim. Citizens in states that mandate child-only policies be offered, such as Maine and New York, will retain an option to purchase the plans.
Health insurers had argued that the mandate against pre-existing condition denials would allow parents to buy insurance only after their children get sick and not before. Because of their objection, the Obama administration added a provision in the health reform legislation that allows policy issuers to establish limited enrollment periods and other restrictions.
In spite of this allowance, an Aetna spokesman told The Wall Street Journal on Tuesday that the companies made the decision to “protect” existing child policy holders from inflating premiums.
“We’re just days away from a new era when insurance companies must stop denying coverage to kids just because they are sick, and now some of the biggest changed their minds and decided to refuse to sell child-only coverage,” said Ethan Rome, executive director of activist group Health Care for America Now, in a media advisory.
“The latest announcement by the insurance companies that they won’t cover kids is immoral, and to blame their appalling behavior on the new law is patently dishonest.”
Karen Ignagni, president and CEO of industry group America’s Health Insurance Plans, wrote to the Department of Health and Human Services, pledging their insurers would follow mandates on pre-existing coverage. She even gave the industry credit for a 2008 proposal to do away with the pre-existing condition classification altogether.
“With respect to the provisions related to coverage for children,” she wrote, “we await and will fully comply with regulations consistent with the principles described [by the administration].”
Citing that letter, which was dated March 29, Speaker of the House Nancy Pelosi (D-CA) verbally assailed the insurance industry for “violating their promise.”
“Health insurance companies, which have long discriminated against millions of people when they need coverage the most, are now violating their promise to write new policies to cover children with pre-existing conditions,” she said in a media advisory. “Earlier this year, the companies pledged to cover children with pre-existing conditions – in keeping with the spirit of reform that requires they no longer drop coverage for these children. Now, some companies are backtracking on writing new policies, potentially leaving many children without the health insurance they desperately need.”
“[Time] after time,” she concluded, “insurance companies will place profits over patients.”
HCAN added: “[The insurance industry] should reverse their actions immediately and simply follow the law. If the insurance companies can casually turn their backs on sick children now, who will they abandon next? This offensive behavior by the insurance companies is yet another reminder of why the new law is so important and why the Republicans’ call for repeal is so misguided.”
Many Republicans have said they want to repeal the health reform provisions passed by Democrats earlier this year. Former Arkansas Governor Mike Huckabee, who many see as a likely contender for the GOP presidential nomination in 2012, even said recently that allowing insurers to deny coverage for pre-existing conditions should be permitted.
“It sounds so good, and it’s such a warm message to say we’re not gonna deny anyone from a preexisting condition,” he told the Values Voters Summit last week. “Look, I think that sounds terrific, but I want to ask you something from a common sense perspective. Suppose we applied that principle [to] our property insurance. And you can call your insurance agent and say, ‘I’d like to buy some insurance for my house.’ He’d say, ‘Tell me about your house.’ ‘Well sir, it burned down yesterday, but I’d like to insure it today.’ And he’ll say ‘I’m sorry, but we can’t insure it after it’s already burned.’ Well, no preexisting conditions.'”
“So much for the days of compassionate conservatism,” quipped Rick Ungar, blogging for Forbes.
“I guess Huck figures that a child born with a serious medical condition should never be entitled to expensive but needed medical care throughout his or her life because, in the Governor’s words, that house has already burned down.”
The pre-existing conditions classification for children ends on Thursday.