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Health Insurers in Certain States Won’t Issue Child-Only Policies Anymore

Parents in some states may have fewer choices when shopping for insurance coverage for their children. Many insurers--anticipating rules this week that will bar them from refusing to cover sick children--say they won't issue child-only policies anymore.

A provision of the health care bill that bars health insurers from refusing to cover sick children with pre-existing conditions will go into effect on Thursday, and several of the nation’s largest health insurers, anticipating the change, have found a way to avoid bearing the law’s full effect.

Many have dropped child-only policies altogether, in states where they’re allowed to. Because the health care overhaul prevents insurers from turning down coverage of kids, insurers are afraid parents will wait until their children are sick to enroll them. In August, the Obama administration issued a clarification, allowing insurers to restrict enrollment of children to particular “open enrollment” periods, if allowed by state law.

Apparently, that wasn’t enough for the insurance companies. WellPoint’s Anthem Blue Cross & Blue Shield, Aetna, Cigna, CoventryOne, Humana, and UnitedHealth Group’s UnitedHealthCare have all said they will stop writing new child-only policies in one or more states, according to reports from Dow Jones Newswires and The Hill. The affected states include Colorado, California, Ohio, and Missouri.

Here’s The Hill, explaining what this decision could mean:

The announcement could lead to higher costs for some parents who are buying separate coverage for themselves and their children at lower cost than the family coverage that's available to them.

The Obama administration has criticized the insurers for turning their backs on “some of our most vulnerable Americans.” (Children covered by existing child-only policies will continue to receive coverage.)

A Department of Health and Human Services spokeswoman told Politico,“Insurance companies have pledged to offer coverage to children with pre-existing conditions, and we expect them to honor that commitment.”

Insurers have said their decision to drop child-only coverage was prompted by uncertainty in the health insurance market. Dow Jones cited WellPoint’s response, for instance:

We have reviewed the rules regarding the provisions of the Patient Protection and Affordability Care Act (PPACA) limiting the application of pre-existing condition exclusions for children under 19," WellPoint said in a statement. "Unfortunately, there remains a great deal of uncertainty as to how the rules will be implemented and what the impacts might be on participating insurers.

"While some carriers may continue to offer child-only policies, other carriers have dealt with this lack of clarity by choosing to discontinue new business sales of their child-only policies. Some have cited the lack of an effective mandate for individuals to obtain coverage, as well as ongoing market uncertainty," WellPoint said.

Cigna’s vice president of public policy, G. William Hoagland, told Politico that the company “would love to stay in the market” for child-only coverage, but “you can’t have guaranteed issue for this population and be the only one out there.”

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