NCPA - National Center for Policy Analysis

Insurers Ending Child-Only Policies

September 23, 2010

Several of the nation's largest health insurance companies will no longer write "child-only" policies -- a small, niche market -- over concern that the health reform law will make the market unstable and unprofitable, says Politico.

  • Beginning Thursday, insurance companies will no longer be allowed to turn down any child who applies for coverage, even if he or she has a pre-existing condition.
  • Insurers are worried that children -- or, more likely, their parents -- might apply for coverage literally on the way to the hospital or doctor's office and cancel it once treatment is complete.
  • The lack of child-only coverage has the potential to keep healthy consumers out of the market, driving up costs.

The scenario underscores the delicate relationship between the government mandates and the insurance marketplace that will be required for successful implementation of the health care reform law.  It has also raised concerns about what will happen in 2014, when insurers won't be able to turn down coverage for adults, either.

  • Child-only policies make up less than 10 percent of single-coverage plans sold directly to individuals, according to rough industry estimates.
  • The changes won't alter policies already in existence or coverage for kids on family plans.

Source: Jennifer Haberkorn, "Insurers Ending Child-Only Policies," Politico, September 21, 2010.

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