I mentioned this in The Roundup yesterday, but this move from the insurance industry is predictable, but nonetheless takes some gumption.
Some of the country’s most prominent health insurance companies have decided to stop offering new child-only plans, rather than comply with rules in the new health-care law that will require such plans to start accepting children with preexisting medical conditions after Sept. 23.
The companies will continue to cover children who already have child-only policies. They will also accept children with preexisting conditions in new family policies.
Nonetheless, supporters of the new health-care law complain that the change amounts to an end run around one of the most prized consumer protections.
“We’re just days away from a new era when insurance companies must stop denying coverage to kids just because they are sick, and now some of the biggest changed their minds,” Ethan Rome, executive director of Health Care for America Now, an advocacy group, said in a statement. “[It] is immoral, and to blame their appalling behavior on the new law is patently dishonest.”
WellPoint and CIGNA, two of the insurers who made this decision, are among the biggest in the marketplace. Despite this, child-only plans represent between 100,000 and 700,000 individuals nationwide, so this might not have a huge impact. In addition, poor children with pre-existing conditions would qualify without exclusion under Medicaid or SCHIP.
However, this is not the only area where we’re seeing something like this. The ACA creates a law forcing a high medical loss ratio; insurance companies try to game it (consumer advocates appear to have won the first round, however). The ACA put into place early provisions like limiting annual and lifetime limits and allowing children to stay on their parents’ policies until the age of 26; insurance companies use that as a pretext to jack up premiums, far beyond the cost of these measures. The ACA chopped the donut hole in half in the near term and eventually will eliminate them; pharmaceutical companies may respond by increasing drug prices to offset the cost of the discount.
So in addition to having to fend off the slow chipping away of the law by the GOP, especially if they gain power over one or both houses of Congress, Democrats have to deal with the foxes they left in the henhouse, who are systematically working to preserve their own profits at the expense of consumers. This could have been mitigated by real competition in the marketplace through a public insurance option, or of course removed as a problem with a single-payer system. Neither of those options occurred, and we’re left with a health care system still hampered by a giant profit-sucking machine at its center.
The Obama Administration thinks they can get the insurers to renege on this promise on a technicality:
But officials of the Obama administration said the move contradicted a letter from the leader of one of the insurance industry’s most important trade groups after the law’s adoption in March. Karen Ignagni, president of America’s Health Insurance Plans, expressed support for the law’s provisions concerning children with preexisting conditions and promised to “fully comply” with them.
“We expect [insurance companies] to honor that commitment. Insurers shouldn’t break their promise and turn their backs on some of our most vulnerable Americans,” said Jessica Santillo, a spokeswoman for the Department of Health and Human Services.
Yeah, I’m sure that piece of paper they signed will certainly back them up and change their minds.
It’s almost exciting to see what new and innovative strategies the industry will take with additional rollouts of parts of the law. Exciting in that tragic way.