Insurance Industry Agrees to Cover Children with Pre-Existing Conditions

Jodi Jacobson

The Associated Press reported last night that "the insurance 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."

The Associated Press reported last night that “the insurance 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.”

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

Assurances on this point were provided in a letter to Health and Human Services Secretary Kathleen Sebelius. “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.

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.

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AP reports that the industry’s response followed a sternly worded letter from Sebelius earlier in the day. In it, the administration’s top health care official tried to put an end to questions about the law’s intent and wording.

“Health insurance reform is designed to prevent any child from being denied coverage because he or she has a pre-existing condition,” Sebelius wrote to Ignagni. “Now is not the time to search for nonexistent loopholes that preserve a broken system.”

Sebelius specified that a child with a pre-existing medical problem may not be denied access to parents’ coverage under the new law. Furthermore, insurers will not be able to insure a child but exclude treatments for a particular medical problem.

“The term ‘pre-existing condition exclusion’ applies to both a child’s access to a plan and his or her benefits once he or she is in the plan,” Sebelius wrote. The new protections will be available starting in September, she said.

As we reported this weekend and as was reported in the New York Times yesterday, insurance companies appeared to move quickly to interpret the law as less than clear on whether children with pre-existing conditions, and not currently covered under health insurance, were guaranteed to be covered this year, leading to what some claimed was a gap between the rhetoric about health reform and the reality of the law. 

If the problem had persisted, notes the AP article, “some parents and their children may have had to wait a long time for coverage. The law’s broad ban on denying coverage to any person on account of a health condition doesn’t take effect until 2014.”

The problem on the issue of covering kids was that the law could also be interpreted in a more limited way.

Narrowly read, it seemed to say that if an insurance company accepts a particular child, it cannot write a policy for a child that excludes coverage for a given condition. For example, if the child has asthma, the insurer cannot exclude inhalers and respiratory care from coverage, as sometimes happens now.

But that meant the company could still turn down the child altogether.

Indeed, notes AP, House and Senate staffers on two committees that wrote the legislation said last week it stopped short of an ironclad guarantee. House leaders later issued a statement saying their intent in writing the legislation was to provide full protection.

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