Some Insurers Threaten to Drop Individual Health Insurance for Children
September 2010
The 23rd of this month marks the legalization of several mandates applied by the new healthcare bill, including some tremendous shifts in
family health insurance.
The largest of these shifts in medical coverage comes from two new mandates that were designed to better protect children and young adults struggling to get coverage on the
individual health insurance market.
But it appears that some insurance companies aren't going to commit without a fight.
The first shift comes from insurance mandates applied to young adults. As of September 23rd parents can keep their kids on their family health insurance plan until the age of 26. With increasing unemployment it has been harder and harder for many young adults to find jobs that offer medical coverage.
As it says at MercuryNews.com,
medical coverage has become a holy grail of sorts for young people, and September 23rd will be "a day to celebrate."
But insurance companies aren't celebrating, particularly in light of the other and potentially more costly law that will take effect that day. As of the 23rd, insurance companies can no longer deny children coverage based on a medical condition.
Since pre-existing conditions are so expensive for insurance companies, losing the ability to deny medical coverage to kids with such conditions could cost them a lot of money. As a result, many insurers are threatening to cancel individual health insurance plans for children at all.
WellPoint, Cigna, and CoventryOne all cite this new law as their rationale for dropping individual health insurance for children. Their fear is that parents will wait until their child is sick or diagnosed with a condition before getting an individual health policy for them. This could cost insurance companies thousands, if not millions, of dollars.
Facts on:
Family Health Insurance
Did you know...
As of September 23rd, 2010 it will be illegal for insurance companies to deny children coverage based on pre-existing conditions?
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Their alternative is to continue offering insurance for children as part of a family health insurance policy. This way some of the premiums paid by parents for the rest of the family will offset the costs of insuring children with pre-existing conditions.
The fear is that poorer people who can't afford insurance for themselves won't be able to get coverage for their children.
Medicaid is one alternative - it offers medical coverage to parents and children living at or below the poverty line.
Another option would be the upcoming pools for high-risk individuals who can't get insurance elsewhere. Every state is slated to offer them in the coming months.
Robert Zirkelbach, a spokesperson for America's Health Insurance Plans (AHIP) adds that in 2014, when all Americans are expected to have health insurance, it will be much easier for insurance companies to "fully comply" with mandates that include covering individuals with pre-existing conditions.
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