Insurance companies shouldn't drop child-only health care policies
Some insurance companies, including Regence BlueShield in Washington, announced they would drop child-only health-care coverage. Guest columnist Barry Lawson argues that industry's reasons don't hold up and they should reconsider.
Special to The Times
THOUGH the new health-care-reform bill is starting to take effect, the reaction of some insurance companies to a tenet designed to ensure health coverage for children potentially could do just the opposite.
Regence BlueShield in Washington, which currently covers 2,500 children, recently announced that it will no longer offer child-only coverage.
On Sept. 23, new rules created by the Patient Protection and Affordable Care Act call for insurance companies to honor all applications for child-only coverage regardless of pre-existing conditions. Of note, Premera Blue Cross, with about 1,400 policies in our state, will continue selling policies for now. Nationally, other companies, including Anthem, Aetna and Cigna, have announced the non-issuance of policies to tens of thousands of children, regardless of their health histories.
Reasons for dropping coverage include market instability, as select companies drop out of the market. Insurers also note that, without mandating all individuals be covered, the child-only plans may be those with higher medical bills, putting the insurer at undue risk.
Prior to passage of the health-reform act, Karen Ignagni, the President and CEO of an industry trade group, America's Health Insurance Plans, stated that the insurance industry would "fully comply" with the law's coverage requirement. The opposite has happened.
A comprehensive survey of policies in October 2009 performed by the insurance industry reviewed 2.6 million plans, covering 4.6 million people and including data on 1.8 million individual plans in all age groups.
About 23 percent of all policies nationwide were held by people 24 years or younger. For single policies, annual premiums ranged from $1,350 for a person under age 18 to $5,755 for a person 60 to 64 years old. Eight percent of single policies were written for children under 18 years.
Of 1,763,367 individuals in the survey whose applications were medically underwritten, 87.3 percent were offered coverage. The denial rate of children under 18 years was the lowest of any age group at 4.8 percent, compared with 29.2 percent denials in the 60 to 64 age group.
Six percent of applicants were offered coverage with "condition waivers," which stipulate exceptions from coverage for specified health conditions. Of this group, children had the lowest rate of waivers issued.
Health-care reform was designed to work in conjunction with a healthy insurance industry. The issues put forth by the insurance industry to defend non-issuance of new child-only policies makes neither economic nor policy sense. Some would say it's immoral not to cover children who need insurance.
Children are not the problem. They are relatively healthy, needing mostly preventive care. Even insurance-industry data revealed children to be one of the safest groups to insure. They are relatively inexpensive and are denied coverage the least of any demographic group. Maintaining their health probably gives society the greatest return on its investment of health-insurance dollars spent.
This non-issuance policy is nothing more than a shot across the bow by some insurance companies to stem government controls on how health insurance is distributed. It doesn't increase the bottom line of the insurance industry to lock out children.
As a matter of fact, if their argument holds water, then children would be the least risky, thus more profitable group to insure. Continuance of a non-issuance policy for child-only coverage will leave the industry with a greater proportion of more risky adult portfolios.
If the insurance industry wants to maintain credibility as a partner in any reform movement, it should not be done on the backs of politically helpless children. It should reconsider its decision and continue the sales of child-only policies.
The insurance industry should pick on someone its own size, and leave the children alone.Barry Lawson, M.D., is director of Evergreen Hospital Medical Center's Neonatal Intensive Care Unit.
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