In the give and take between the Obama administration and the insurance industry over health care reform, it appears that the federal government has blinked in the face of a decision by major insurers to stop writing policies for children only. The industry asserts that families are taking out the policies after they become aware of an illness or medical problem and thus the product is, for the industry, not profitable.
The Obama administration conceded, on Wednesday, October 13, 2010, that insurers can charge higher premiums to children with serious medical conditions where such fees are allowed by state law. The government already said, in September, that insurers could establish open-enrollment periods for children and charge higher fees to applicants outside that set period.
By law, children with pre-existing conditions cannot be excluded from coverage under their parents’ policies, but the statute does not address child-only policies, which parents often take out when they cannot afford family policies or when their employer does not provide benefits to dependents. The difficulty with maintaining access to child-only coverage is an unintended consequence of health care reform, but one that currently has no legal remedy.
In a statement, Secretary of Health and Human Services Kathleen Sebelius said, “Unfortunately, some insurers have decided to stop writing new business in the child-only insurance market, reneging on a previous commitment made in a March letter to ‘make pre-existing condition exclusions a thing of the past.’”
Sebelius goes on, however, to admit that, “Nothing in the Affordable Care Act, or any other existing federal law, allows us to require insurance companies to offer a particular type of policy at this time.”