Insurance Companies Find Loophole, Leaving Sick Kids Without Coverage

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insurance company loophole leaves children without coverage

Insurance companies are doing away with individual policies for children. Credit: Getty Images

This was supposed to be the week when a new federal law kicks in, banning insurance companies from denying individual policies for children with a history of health problems.

Not so fast.

NPR reports many insurance companies are simply refusing to write new policies for individual children. Period. End of discussion.

This move alleviates the pain and suffering of insurance companies, but leaves countless children and their parents banging on clinic doors.

According to NPR, insurance companies jumping on the loophole bandwagon include Anthem, WellPoint, CoventryOne, Aetna, Cigna and Humana. All of their executives blame health care reform or "uncertainty in the health insurance market."

By refusing to offer policies for individual children before the new law takes effect, companies do a little sidestep.

"Even for the insurance industry this behavior is surprisingly brazen," Health Care for America Now Executive Director Ethan Rome writes in a blog entry for the Huffington Post. "They don't like the rules, so they're going to take their ball and go home."

Hey! That's not what they promised.

NPR reports Karen Ignagni, the CEO of the trade group America's Health Insurance Plans, pledged earlier this year that insurance companies would comply with laws regarding children and pre-existing conditions.

Well, that's not exactly what she meant, group spokesman Robert Zirkelbach tells NPR. Ignagni merely promised children with pre-existing conditions would not be excluded from their parents' plans, he says. She never said anything about children with individual policies.

Upcoming reforms, Zirkelbach tells NPR, enable parents to wait until their children are sick before seeking health insurance. Insurance industry executives hate that sort of thing. They say they need the premiums of the healthy to cover the cost of the sick.

Companies rushing toward the loophole, Zirkelbach adds, "are having to make some difficult decisions" to stop covering all new children, lest only the children who really need health insurance try to get it.

The loophole closes in four years when, under the law, everyone is supposed to be covered.

Related: Young People Could Fall Through Cracks in Health Care Reform

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AdviceMama Says:
Start by teaching him that it is safe to do so.