NCPA - National Center for Policy Analysis


July 26, 2010

Some major health insurance companies will no longer issue certain types of policies for children, an unintended consequence of President Barack Obama's health care overhaul law, state officials said Friday. 

  • Florida Insurance Commissioner Kevin McCarty said several big insurers in his state will stop issuing new policies that cover children individually.
  • Oklahoma Insurance Commissioner Kim Holland said a couple of local insurers in her state are doing likewise. 

In Florida, Blue Cross and Blue Shield, Aetna and Golden Rule -- a subsidiary of UnitedHealthcare -- notified the insurance commissioner that they will stop issuing individual policies for children, said Jack McDermott, a spokesman for McCarty. 

  • The major types of coverage for children -- employer plans and government programs -- are not be affected by the disruption.
  • But a subset of policies -- those that cover children as individuals -- may run into problems.
  • Even so, insurers are not canceling children's coverage already issued, but refusing to write new policies. 

Starting later this year, the health care overhaul law requires insurers to accept children regardless of medical problems -- a major early benefit of the complex legislation. Insurers are worried that parents will wait until kids get sick to sign them up, saddling the companies with unpredictable costs. 

Blue Cross and Blue Shield of Florida issues about 9,000 to 10,000 new policies a year that only cover children.  Vice president Randy Kammer said the company's experts calculated that guaranteeing coverage for children could raise premiums for other individual policy holders by as much as 20 percent. 

"We believe that the majority of people who would buy this policy were going to use it immediately, probably for high cost claims," said Kammer.  "Guaranteed issue means you could technically buy it on the way to the hospital." 

Source: Ricardo Alonso-Zaldivar, "Some insurers stop writing new coverage for kids," Associated Press,  


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