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Insurers Agree to Insure Kids With Pre-Existing Conditions

March 30, 2010 - by Donny Shaw

Shortly after the health care bill was signed into law last week, it became clear that someone, either the Democrats in Congress or President Obama, had messed up. Obama had been saying publicly that the bill would immediately ban insurance companies from denying children with pre-existing conditions from buying new insurance plans. But what the bill actually did was ban insurers from denying certain services for children with pre-existing conditions who are already insured.

Here’s the relevant language — first the section dealing with pre-existing condition exclusions that is moved up from 2014 to 2010 for children:

‘(2) the provisions of section 2704 of the Public Health Service Act (as amended by section 1201), as they apply to enrollees who are under 19 years of age, shall become effective for plan years beginning on or after the date that is 6 months after the date of enactment of this Act.’. [link]

And here’s how §1201 of the new health care law amends §2704 of the Public Health Service Act:

SEC. 2704. PROHIBITION OF PREEXISTING CONDITION EXCLUSIONS OR OTHER DISCRIMINATION BASED ON HEALTH STATUS.

‘(a) In General- A group health plan and a health insurance issuer offering group or individual health insurance coverage may not impose any preexisting condition exclusion with respect to such plan or coverage.’;[link]

So, pretty clearly, the bill only moves up the ban on pre-existing exclusions, which are items within existing plans that are specifically not covered by insurance. In other words, it would require insurers who currently provide coverage for children with certain exceptions based on ongoing medical situation, like not paying for treatments related to a heart condition, to cover drop the exclusion 6 months from now and begin covering all services.

To fix the situation, HHS Secretary Kathleen Sebelius said she would issuing regulations that would apply Obama’s interpretation over the letter of the law, but it was unclear whether insurers would follow regulations that go beyond what had been passed by Congress and signed into law. Today, the health insurers announced that they will voluntarily go beyond the letter of the law and immediately stop denying children with pre-existing conditions from getting new insurance plans.

After battling President Barack Obama’s health care overhaul the better part of a year, the insurance industry said Monday it won’t try to block his efforts to fix a potentially embarrassing glitch in the new law.

In a letter to Health and Human Services Secretary Kathleen Sebelius, the industry’s top lobbyist said insurers will accept new regulations to dispel uncertainty over a much-publicized guarantee that children with medical problems can get coverage starting this year.

Quick resolution of the doubts was a win for Obama — and a sign that the industry has no stomach for another war of words with a president who deftly used double-digit rate hikes by the companies to revive his sweeping health care legislation from near collapse in Congress.

“Health plans recognize the significant hardship that a family faces when they are unable to obtain coverage for a child with a pre-existing condition,” Karen Ignagni, president of America’s Health Insurance Plans, said in a letter to Sebelius. Ignagni said that the industry will “fully comply” with the regulations, expected within weeks.

They pretty much had to concede. If they didn’t, the Democrats could have pursued corrective legislation to fix this one issue. I’m fairly certain that a bill to provide more immediate help to sick children would have sailed through Congress. By volunteering to abide by Sebelius’ regulation, the insurers are getting out ahead and putting themselves on the popular side of this affecting issue.

Image of child getting a bandage by radioflyer007 used under a CC license.

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