The wedding date for most provisions of the Affordable Care Act (ACA) may be
January 1, 2014 but we’re celebrating the engagement tomorrow, September 23,
2010, when a number of insurance market reforms go into effect for new plans.
These early wins for children and families include the end
of insurance industry discrimination against children with pre-existing medical
conditions. But just as we were ready to pop the champagne, the headlines suggest that insurers are reneging on their promise to cover these vulnerable
kids. Instead of complying with this provision as they promised back in March,
plans across the country are breaking the engagement and leaving sick kids
standing at the altar.
The relationship over this particular issue got off to a
rocky start. Within days of passage of health reform, insurers indicated they
were interpreting the ACA differently than what was being reported by the
Administration in the media regarding this
provision. Insurers contended that the law did not require them to guarantee
coverage for pre-existing conditions for children until 2014 when the provision
goes into effect for adults as well.
In a letter to the insurance industry, the Administration
pledged to clarify the issue through regulations but stood faithful to the
intent of Congress for a timely elimination of pre-existing exclusions for
children. The reply from America’s Health Plans President Karen Ignagni, was
“we await and will fully comply with regulations consistent with the
principles described in your letter.” In that letter Ignagni said: “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.” So it seemed that a prenuptial deal was struck!
A good marriage requires give and take. The subsequent
regulations gave insurers a way to protect their interests but took away their
ability to deny coverage to sick kids outright. The regulations allow insurers to establish open enrollment periods that limit when families
can get coverage for their children’s pre-existing condition. Additionally,
subject to state law or regulations, plans can add premium surcharges for these
It is important to point out that not all uninsured
children with pre-existing conditions will be looking to purchase coverage
directly. Nearly 60% of uninsured children are eligible for Medicaid or CHIP, and they and their families would be better served in
these child-friendly programs. Additionally, children who have been uninsured
for six months may qualify for subsidized coverage through the new Pre-Existing
Condition Plans established by the ACA.
This is a very fixable issue if insurance companies don’t
get cold feet, particularly considering that there are very few children who
are in these plans. Several states are working on rules to provide clear
guidance to insurers including California where legislation (AB 2244) awaits the Governor’s signature.
The latest in this stormy relationship with insurers
illustrates once again why we need to move forward with full implementation of the Affordable Care Act to provide paths to coverage for children and families.