Yamileth Medina

Health Insurance Companies Find Loophole In Children's Coverage



Posted: Monday, March 29, 2010

by Yamileth Medina
VitalOne Health

Due to the sheer length of the healthcare reform bill, it was probably inevitable that there would be a handful of errors sprinkled in. However, this one is pretty significant. It has the potential to affect what has been touted as one of the legislation's immediate impacts: health coverage for children.

President Obama has promoted the benefit targeted at children, which is intended to prevent insurers from denying children coverage due to a pre-existing health condition. Such a provision is clearly popular with the public. Eliminating restrictions on pre-existing conditions is favored by the public in general--although they are split on the best way to go about it--but it is even more appealing for children. Unlike adults, who sometimes contribute to their own conditions, kids aren't ill by any fault of their own. While still controversial, the promise of that immediate benefit has caused some people to come around to healthcare reform.

Unfortunately, it appears that the legal language may not be strong enough. Health insurance companies have had their lawyers poring over the final legislation, and they believe that it is not clear enough. Their interpretation of the provision is that it only requires them to cover pre-existing conditions for children whom are already insured. According to them, it does not mean that they are forced to write a new policy for a child with pre-existing conditions.

While preventing children from being denied affordable health insurance is clearly the intent of the bill's Democratic authors, intent isn't enough in the eyes of the court. Industry lawyers also state that the bill allows health insurers to increase their premiums for those with pre-existing conditions. Specifically, the provision does not mention an immediate "guaranteed issue" requirement; rather, it only states that providers "may not impose any pre-existing condition exclusion". That means that there will no longer be a paradox where a child is covered, yet their most significant health problem is not; a very expensive and annoying issue for parents. It is unconscionable that Congress managed to miss this error, even if the bill is 2,000 pages long!

What can be done now? The Obama administration is planning to release regulations that clarify the fact that "pre-existing" refers to both initial access to insurance and receiving full benefits once in it, but such regulations may see challenges. Democrats are working on crafting emergency legislation that would fix the bill and close this loophole, but there's a small chance that Republicans would choose to filibuster in the Senate in order to maximize the other party's embarrassment. If worst comes to worst, children with pre-existing conditions won't be guaranteed access to health insurance plans until 2014, when a similar requirement for adults takes effect. Existing skepticism over the health care bill will heighten in that case.

(Image: efleming under CC 3.0)

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