Unintended Consequence of Health Reform: Elimination of Child-Only Policies


Some of the biggest health insurance companies have decided to eliminate child-only policies as an option due to the potentially huge and unexpected costs for insuring children. Anthem Blue Cross, Aetna Inc, Cigna, Coventry One, and Humana will halt policies in California, Illinois, Florida and Connecticut as early as Thursday, September 23.

Large Health Insurance Companies Fear a "Huge Financial Burden"

The major health insurance companies are making the move as new federal healthcare laws take place that bars them from rejecting children under age 19 with preexisting medical conditions. The action will apply only to new coverage and not to existing child-only plans, family plans or insurance provided to children through their parents’ employers.

The insurers state that they believe the change to have a small effect on families, as they now only sell relatively few child-only policies. It is estimated that somewhere between 100,000 and 700,000 children are currently on child-only health insurance policies.

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However, this could change as the new ruling that prohibits policy restriction against those with pre-existing conditions, as parents may be more apt to buy policies only after their kids become sick causing a “huge financial burden.”

"Unfortunately, this has created an un-level competitive environment," said Anthem Blue Cross, California's largest for-profit insurer.

Experts say that as many as 500,000 children in the United States are currently without insurance, 80,000 in California alone. The elimination of child-only policies would force more families to enroll in public insurance plans such as Medicaid and the Children’s Health Insurance Program that are already financially strapped.

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"It's obviously very unfortunate that insurance companies continue to make decisions on the backs of children and families that need their help," White House Press Secretary Robert Gibbs said at a news briefing.

Ethan Rome, executive director of Health Care for America Now, said “We're just days away from a new era when insurance companies must stop denying coverage to kids just because they are sick, and now some of the biggest changed their minds. [It] is immoral, and to blame their appalling behavior on the new law is patently dishonest."