Unintended Consequences for Kids

Okay, I know I’m being generous in calling it “unintended.” You really have to be dumb not to have seen this coming. But c’est la vie.

Major health insurance companies that serve Florida, Kansas, Oklahoma and other states no longer are offering plans specifically for children in response to a requirement under the new health reform law that insurers cover children regardless of pre-existing conditions, according to the National Association of Insurance Commissioners officials.  Under the overhaul, insurers are required to honor all applications for child-only coverage, and parents can sign up for the plans at any time, particularly when their children get sick.

Full article from California Healthline here.

Comments (13)

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  1. Ken says:

    Agree with you. This should have been obvious.

  2. Bruce says:

    Doh. You mean we can’t wait until we get sick to buy insurance for the price healthy people pay? How unfair.

  3. artk says:

    How tone deaf can a industry be? The fact is that regardless of your views on the health care reform law, it’s put a spotlight on what most believe to be the abusive aspects of the health care insurance companies. This is how the Swiss system started, they saw how abusive the insurance companies were becoming and they put a stop to it. The insurance companies have a choice, include social responsibility in their decision making, or face the ire of the public in the form of increasingly restrictive legislation. Remember, all it takes is a law saying “Medicare for everyone” and they are out of business.

  4. Bruce says:

    artk, If everyone can wait until he is sick to buy insurance, no one will buy when he is healthy. Insurance premiums will go through the roof. That’s not being socialy responsible. That’s being stupid.

    Even Medicare won’t let you wait until you are sick to join Part B with impunity. Same for the government sanctioned Medigap plans.

  5. Linda Gorman says:

    Next up, “socially responsible” laws requiring property insurance companies to sell policies to homeowners when their homes are on fire, and laws requiring auto insurers to insure cars after they have been stolen.

  6. Neil H. says:

    At the risk of being a conspiracy theorist, maybe this result was intended.

  7. Devon Herrick says:

    Guaranteed issue / community rating (CICR) laws serve little other purpose than to redistribute money from one pocket to another. Proponents like to think this is a willing (wealth) transfer from the healthy to the sick. But in some cases CICR transfers wealth from younger people (just starting out) to older (wealthier) people. As was mentioned by earlier posters, GICR also functions as a wealth transfer from people who play by the rules (and maintain continuous coverage) to those who would game the system.

    Proponents have little sympathy for insurers who try to dodge these money-losing clients. But forcing insurers to eat the cost of accepting unprofitable customers is not any more ethical than forcing people to bear the higher cost of their own diminished health status.

    To properly function, insurance needs to involve adjusting for risk, the likelihood of which needs to be relatively unknown. Once a risk is known (e.g. like my house is on fire), no insurer would willingly offer subsidized coverage; and no policyholder would willingly want to cross-subsidize another customer.

  8. Virginia says:

    Interesting idea, Neil. Perhaps this is just a step in the process:
    – pass laws that are “supposed” to make insurance companies take on sick children.
    – watch as insurance companies stop covering children altogether.
    – leak a video of a sick child that can’t get coverage to the media.
    – pass “emergency” legislation adding all minors to Medicare.

    It serves the single-payer party very well.

  9. artk says:

    Devon, all health insurance works by redistributing money from the healthy to the sick. The only way an insurance company can avoid money losing clients is to drop converge the minute someone needs a penny more in medical care then they have paid in premiums. They have no problem pricing guaranteed issue for large groups. Why should the individual market be any different.

  10. Linda Gorman says:

    artk–it has been illegal for insurance companies to drop sick people, or raise their premiums, in the individual market for years. Guaranteed issue for large groups is hideously expensive. This is in spite of the fact that large groups are already screened for health risk by the fact that the people in them have to work. In fact, one thing that makes individual insurance better is that you do not lose coverage if you are too sick to work.

    Also keep in mind that large groups often are paid for out of cash flow, not via insurance. The prices quoted for insurance may vary depending on who is in and who is out of the policy the employer buys to contain its losses. Those policies may require large payments by the employer before they kick in.

    Insurance companies avoid money losing clients by properly assessing the risk each client represents and charging him appropriately.

  11. Devon Herrick says:

    HHS is now claiming that insurers are allowed to set up reasonable open enrollment periods in accordance with state laws. I hope the Administration understands the need to further restrict the ability of individuals to game the system. Beside open enrollment periods, firms should have the right to turn away applicants that have not maintained continuous coverage (without significant gaps). Insurers should also be allowed to refuse people who have a history of enrollinging and dropped coverage after receiving costly treatments.

  12. John R. Graham says:

    I don’t think we should use the term “unintended consequence” in this case. It is an “unadvertised consequence” but it is not credible that many of the people who made this law did not know that this would be one of the consequences. As Virginia suggests, this is a predictable step on the path to single-payer, government-monopoly, health care.

    artk: Stating that “health insurance works by redistributing money from the healthy to the sick” is like saying auto insurers redistribute money from drivers with undamaged cars to drivers with damaged cars. It completely misunderstands the concept of insurance, which is mitigating the cost of risk. All insurance works by collecting premiums from people who have not yet suffered catastrophic loss, but have a risk of suffering it, and then paying out to those who actually do suffer losses.

  13. Marlene says:

    Ouch! I’ve been on ctecrhus so many times tell you brother I know how he feels! The problem with getting insurance is that many insurance companies won’t cover pre-existing conditions. Therefore, you might want to consider an affordable alternative to insurance a medical discount plan. Basically, you pay a low monthly fee and then receive extremely discounted ( cash ) rates when you visit the doctor, dentist, chiropractor, psychiatrist, etc. I work for a company based out of Dallas that offers these plans, starting at $ 11.95 per individual per month, and not more than $ 59.95 per household per month. This is a great alternative, especially for people who have ongoing conditions and need medical attention immediately, such as your brother will. If he signed up today, he could visit the doctor tomorrow and immediately start receiving the discounts. He can even get discounts on ancillary services (i.e. ctecrhus) and specialists’ visits (such as an orthopedic doctor). And if he needs surgery, the price will be negotiated through my company so that he will pay significantly less. You can e-mail me if you would like (Charlotte at ). I can answer more questions for you or even get you signed up. There is also a 30 day money back guarantee if you decide the plan isn’t right for you. Visit the link below for more information.Best of luck!