As Health Reform Kicks In, Insurers Opt Out of Child Coverage

Just as the Obama administration’s health care overhaul is starting to kick in, health insurers are abandoning coverage for children.

The Los Angeles Times reports that major insurers such as Anthem Blue Cross and Aetna have announced that they will no longer offer child-only policies in California, Illinois, Florida and other states. That comes in response to a provision in the health care reform legislation scheduled to go into effect on Thursday.

The provision prohibits insurance providers from denying insurance to children under the age of 19 for previously existing medical conditions. Insurers argue that this will overload the risk pool with sick children, since many parents might buy policies only after their children develop health problems. As a result, child-only policies could cost insurers money.

Children will still be insurable on family plans and through already held child-only policies. Despite that, an estimated 500,000 children will be affected by the providers’ announcement.

Consumer advocates reacted angrily to the announcement. “Insurers need to decide if they are in the business of providing care or denying coverage,” Anthony Wright, executive director of advocacy group Health Access California, told the Times.

Some California lawmakers want to penalize providers that balk at insuring children. A bill before Gov. Arnold Schwarzenegger would bar companies that stop offering child-only policies from doing business in the state for five years. A spokeswoman for the governor said that he has yet to decide on the measure.

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