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Insurance companies want to drop child-only policies

September 22, 2010 6:43:20 PM PDT
There is an insurance battle going on in Sacramento and children are the right in the middle of it. The issue is whether insurance companies will be allowed to refuse to cover kids needing stand-alone policies.

Health insurers say the new federal healthcare reform plan would create huge, unexpected costs and one way to curtail that is to stop offering certain policies on the individual market where consumers buy their own health insurance.

The new federal healthcare reform plan forbids insurers from rejecting coverage for children with pre-existing conditions. Healthcare advocates say they're outraged companies like Anthem Blue Cross, Aetna, Cigna and others are trying to circumvent that law by taking child-only policies off the market in states like California, as early as this week.

"They're using children as hostages," says Anthony Wright from Health Access California. "It's a pretty stunning admission that they are only interested in covering healthy people, not sick people."

The move would only apply to new policies. It will not affect existing child-only policyholders and family plans provided through their parents' work. The insurance industry fears parents will buy policies only when their children become sick, causing a huge, expensive group to insure, with not enough premiums to cover the costs.

"If we have a system where people can drop in and out only when they need it the most, then it won't work," says Patrick Johnston from the California Association of Health Plans.

Child-only policies are a pretty small market geared towards families who make too much to qualify for public programs and whose jobs don't offer dependent care. Still, mothers like Ja'Net Hendricks, who has children with asthma, want the option there if she ever needs it.

"Just because we have kids and stuff, it's not our fault our kids get sick or they come up with these diseases," says Hendricks.

Pediatricians insist it's more expensive to let kids go without insurance and stay sick.

"When you're letting those kinds of conditions go untreated, under-treated, then you're having more emergency room visits, more hospitalizations and so, obviously, increasing healthcare costs," says Pediatrician Elizabeth Miller, M.D. The plan to eliminate child-only policies could have consequences for insurers in California.

A bill on Gov. Arnold Schwarzenegger's desk bans companies from selling individual politics to anyone if they eliminate child-only plans. The governor has until the end of the month to act on it.


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