The effects of Obamacare are getting weirder with each passing month. Now, new requirements created by the law are causing some insurers to consider no longer offering “child-only” policies to avoid having to raise rates.
Most children are covered by parents’ employer-provided insurance or by government programs. But some parents buy individual health insurance coverage just for their kids. Starting next year, Obamacare prohibits insurers and employer plans imposing any pre-existing condition exclusions on children and requires them to accept all applications for children who qualify for coverage under their plans (so-called “guaranteed issue”). Those provisions could have serious and unintended consequences for children, as well as others.
Insurers fear that, by allowing parents to buy cover coverage for their children whenever they choose, families may wait until a child faces a serious illness to buy a policy. The result: Insurers will need to raise rates for these kid-only policies, and if other regulations limit how much they can raise rates for covering children, then they could be forced to raise rates for adults in the individual market as well.
The Associated Press reports that Blue Cross and Blue Shield of Florida Vice President Randy Kammer “said the company’s experts calculated that guaranteeing coverage for children could raise premiums for other individual policy holders by as much as 20 percent.” According to Kammer, “We believe that the majority of people who would buy this policy were going to use it immediately, probably for high cost claims. …Guaranteed issue means you could technically buy it on the way to the hospital.”
Insurers claim that if the regulations regarding coverage of pre-existing conditions and guaranteed issue for children—which will take effect on September 23—are limited so as to apply only to an open-enrollment period once a year, much of the expected problems might be mitigated. The Department of Health and Human Services, however, hasn’t indicated yet if they will go this route or not.
Insurance commissioners from Florida, Oklahoma, and Kansas all claim that insurers are already refusing to write new individual policies for children in their states. In Florida, Blue Cross and Blue Shield, Aetna, and Golden Rule all plan to stop writing new individual policies for kids. And, as Kansas Insurance Commissioner Sandy Praeger attests, “When it’s happening with national companies, I can guarantee you it’s happening probably in every state.”
Oklahoma Insurance Commissioner Kim Holland points out that “the more we reduce opportunities in the market … the more challenging it is for [families] to secure the coverage that they want and [are] able to afford.” Obamacare’s countless new rules and regulations will certainly limit choices for families—that is becoming clearer by the day.