Disgusting: Health Insurers Exploit Reform Loopholes to Limit Coverage for Children

The health reform law unfortunately was inadequate. It was filled with loopholes. No surprise then that Health Insurance companies are starting to exploit those loopholes to limit coverage -- for children:


The requirement that children under 19 be granted insurance regardless of preexisting conditions has caused Blue Cross and Blue Shield of Florida and many other insurers to stop offering child-only coverage.

Insurers fear they will lose money because parents might sign up for coverage only when their children become sick. That is scheduled to change in 2014, when the law requires that virtually everyone have health insurance — a provision that a federal judge in Pensacola declared unconstitutional on Jan. 31

How can they get away with this? It's easy:


Federal regulators set no enrollment time limits for children younger than 19 to sign up for insurance under individual plans. If an uninsured child was diagnosed with a serious illness, the child’s parents could sign up for insurance at that point — when costs are likely to be highest. That hurts insurers even more when parents haven’t been paying into the system along the way.

“There’s a powerful incentive to wait until after their children are sick” before signing up, Zirkelbach said.

Since that means families might tend not buy insurance for healthy children, the pool of insured children would probably have an inordinate percentage of those who are sick, said Randy Kammer, BCBSF’s vice president of regulatory affairs. That would drive up insurance costs for everyone.

BCBSF still covers all children when families sign up for policies, but has stopped offering the individual child policies. Kammer said she has heard that insurers in 29 states have stopped offering kids-only policies.Zirkelbach agreed the stoppage is widespread, though he didn’t have exact numbers.

A key difference between the two provisions is that employers generally insist on a limited open enrollment period during which workers must sign up for coverage for themselves and their families, said Robert Zirkelbach, spokesman for America’s Health Insurance Plans, the industry’s trade group.

So, if you are too poor to pay for a family policy but want one for your kids you're out of luck. I don't buy the "incentive" to wait excuse. And not surprisingly the health insurance industry trade group spokespeople offer no proof that that their alleged "fears" of kids being signed up only after they get sick would occur.

In my opinion the insurance companies just want to gouge poor to lower middle class people by forcing them to buy family policies even if they can't afford them. Most poor parents want their kids covered even if they can't afford coverage for themselves. Most parents don't want to gamble with the health of their kids.

However, by refusing to offer "kids only" health care policies, insurance companies make it an all or nothing proposition: buy more expensive family coverage during the short window of opportunity to acquire it, or else. If you don't have the money to buy family coverage, too bad. Your kids are screwed.

One more reason see why a single payer health care plan or even a public option would have been better than the health reform bill that did get passed. Vermont is moving toward a single payer plan. I can only hope that other states follow their lead.

Booman Tribune / By Steven D.

Posted at February 8, 2011, 5:19am

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