Insurers Dispute Health Bill’s Mandate to Cover Children with Pre-Existing Conditions

Kaiser Health News reports today that the America’s Health Insurance Plans (AHIP), an insurance industry lobbying group, claims the health reform bill signed by President Obama this week lacks a clear mandate for immediate coverage of children with pre-existing conditions, leaving these children vulnerable for four more years.

[H]ealth advocates and some insurers say the law does not clearly state that such protection starts this year. If it doesn’t, uninsured children with pre-existing conditions might not get help until 2014, when the law requires insurers to issue policies for all applicants regardless of health condition. There is no doubt that for children who are enrolled in insurance plans, the new law bars insurers from excluding coverage of any pre-existing conditions.

According to the authors of the KHN article, Phil Galewitz and Andrew Villegas, America’s Health Insurance Plans, the main insurance lobbying group, says through a spokesman that “it interprets the new law as not requiring insurers to cover all child applicants this year.”

Randy Kammer, a vice president for Blue Cross and Blue Shield of Florida, the largest health insurer in that state, said she interprets the law as allowing insurers to reject coverage for children in some cases until 2014.

Earlier this week, write Galewitz and Villegas, “some health advocates said they worried the health overhaul might not do what was intended.”

“This could be a large loophole,” Janis Gurney, public policy co-director of Family Voices, said Tuesday. The organization, based in Albuquerque, N.M., represents families of children with special needs.

But, KHN reports, officials said Wednesday the law does prohibit insurers from denying children coverage starting this year, but they will issue clarifying regulations.

“The law is clear: Insurance plans that cover children cannot deny coverage to a child because he or she has a pre-existing condition,” Health and Human Services spokesman Nick Papas said. “To ensure that there is no ambiguity on this point, the Secretary of HHS is preparing to issue regulations next month making it clear that the term “pre-existing exclusion” applies to both a child’s access to a plan and to his or her benefits once he or she is in the plan.” 

KHN also quotes a joint statement by Reps. Henry A. Waxman (D-CA), Sander M. Levin (D-MI), and George Miller (D-CA), the Democratic chairmen of the three committees with jurisdiction over health policy in the House of Representatives:

“Under the legislation … plans that include coverage of children cannot deny coverage to a child based upon a pre-existing condition. We have been assured by the Department of Health and Human Services that any possible ambiguity in the underlying bill can be addressed by the Secretary with regulation.”

AHIP and others are warning that being required to cover children with pre-existing conditions will lead to increased insurance premiums and argue for a delay in required coverage.

Health insurers worry that if they’re forced to cover all children regardless of health condition, higher rates will result, because only the families of sick kids would apply. That problem, they say, could be largely avoided if the requirement went into effect in 2014, when most Americans will have to have coverage under the law. AHIP says higher rates resulted when New York and a handful of other states enacted “guarantee-issue” laws requiring insurers to offer coverage to all applicants.

“It is important to keep in mind the experience in states that implemented guarantee – issue laws without getting everyone covered, and the impact those reforms had on the affordability of health care coverage,” said AHIP spokesman Robert Zirkelbach.

The new health reform law requires insurers to cover children who do not have a large gap in coverage, leaving more vulnerable those whose parents buy coverage for children on the individual market and whose children have been uninsured more than two months. Federal law requires insurers to cover children who do not have a large gap in coverage.

One thing is clear, states KHN: “The law does nothing to stop insurers from charging higher rates for children with pre-existing illnesses until 2014 when insurers can no longer use health status in setting premiums.”

Rising insurance premiums have indeed led to record profits by insurance companies.  Triangle Business Journal reports that according to the Washington, D.C.-based Health Care for America Now, the five largest U.S. health insurance companies – including four of the five largest insurers in the Raleigh-Durham area – had a combined profit of $12.2 bilion in 2009.

The group said that was a 56 percent jump from 2008.

The companies are UnitedHealthGroup Inc., WellPoint Inc., Aetna Inc., Humana Inc. and Cigna Corp.

Joan Alker, co-executive director of the Center for Children and Families at Georgetown University in Washington D.C., is among those worried about the language. After learning of the administration’s comments Wednesday, she said, “It is clear they are looking at this, which is good, and it is a very complex and technical issue so I think at this point we will wait and see what happens.”

KHN reports that “Parents whose kids are turned down by an insurer would still have a fallback under the law, even without a regulatory fix. They could seek coverage through an insurance pool for people who can’t obtain coverage. The federal government will support the pool with $5 billion.”

It’s not known how many children are currently denied coverage because of pre-existing conditions. But it’s a common complaint.

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  • crowepps

    And so we begin the long process of finding out exactly how health care reform will actually work in real life as insurance company lawyers pick through and come up with novel interpretations to help avoid anything that will cut into profits.

  • crowepps

    Mar 24, 2010 9:53 pm US/Central

    By Melissa Newton FORT WORTH (CBS 11 / TXA 21)


    Houston Tracy is just 10 days old, but the little boy has already lived through trying times.


    “He was born with what’s called transposition of the great arteries.” his father, Doug Tracy said. “It’s heart wrenching; I hated it.”


    The congenital heart defect causes the two major vessels that carry blood away from the heart to become switched. It’s a condition rarely detected before birth.


    “My whole pregnancy was simple, it was easy, no complications, doctor visits were great,” Houston’s mother, Kim Tracy said. “Perfect sonograms, great little pictures and then, he wasn’t perfect.”


    The baby was rushed to Cook Children’s Medical Center in Fort Worth where he had life-saving surgery.


    “He’s doing really good,” his mother said with a smile, “he’s a little tough guy.”


    While baby Houston is fighting for recovery, his parents found themselves in another battle: Fighting the insurance company, Blue Cross and Blue Shield of Texas.


    The Tracy’s are both small business owners and do not carry health insurance for themselves. They do carry insurance on their two other children and tried to get insurance for Houston, but they found out Wednesday his coverage was denied.


    “They kept saying it’s preexisting, it’s preexisting, but I don’t know how it can be preexisting on a baby that was just born.” his father said. “If it’s mandated that everyone have health insurance, than how can one be denied?”


    Blue Cross and Blue Shield can’t comment on the family’s situation, but did comment about the health care reform law, and how it may affect coverage.


    “We will work closely with our customers to keep them informed of any changes that may result from the new law,” said Margaret Jarvis, the company’s Senior Manager of Media Relations. “We will continue to review the bill’s requirements on our business and their respective time frames to ensure full compliance.”


    While the Tracys said they’ll do whatever it takes for their baby, they have no idea at what cost.


    NOTE: The surgery lengthened the child’s lifespan from “a couple days” to a normal lifetime.  There’s a link to make donations to repay the hospital for saving him at the bottom of the article.