In­sur­ers vs. chil­dren

Los Angeles Times - - Opinion - ongress passed

Ca health­care re­form law this year in part to curb a se­ries of abuses by in­surance com­pa­nies, par­tic­u­larly in the mar­ket for in­di­vid­ual health poli­cies. Some of its pro­vi­sions take ef­fect Thurs­day, pro­vid­ing more safe­guards and ben­e­fits for con­sumers but also rais­ing in­sur­ers’ cost of do­ing busi­ness.

One of the new man­dates is hav­ing an alarm­ing ef­fect on the in­surance mar­ket. As of Thurs­day, in­sur­ers may not deny in­di­vid­ual poli­cies to chil­dren with pre­ex­ist­ing con­di­tions. The rule could af­fect more than 80,000 mi­nors in Cal­i­for­nia who aren’t cov­ered by their par­ents’ poli­cies or by state pro­grams. In re­sponse, at least two ma­jor in­sur­ers — An­them Blue Cross and Aetna — have an­nounced that they won’t of­fer in­di­vid­ual poli­cies in Cal­i­for­nia to chil­dren who don’t al­ready have cov­er­age. Other com­pa­nies are do­ing the same in states across the coun­try.

It’s an un­for­tu­nate but pre­dictable re­ac­tion. In­sur­ers ar­gued through­out the health­care re­form de­bate that forc­ing them to make cov­er­age avail­able to all Amer­i­cans with­out re­stric­tions would lead con­sumers to go with­out cov­er­age un­til they re­quired ex­pen­sive med­i­cal care — a form of “ad­verse risk se­lec­tion” that would cause premi­ums to sky­rocket. Law­mak­ers tried to guard against that by re­quir­ing all adults to ob­tain cov­er­age, start­ing in 2014. But no such re­quire­ment ap­plies to the in­di­vid­ual in­surance mar­ket for chil­dren.

Assem­bly­man Mike Feuer (D-Los An­ge­les) ad­dressed those con­cerns in a bill, AB 2244, that would bar Cal­i­for­nia in­sur­ers from deny­ing cov­er­age to chil­dren with pre­ex­ist­ing con­di­tions, but would let them charge sig­nif­i­cantly higher premi­ums to those who don’t sign up dur­ing open en­roll­ment pe­ri­ods and im­pose sur­charges on those who try to game the sys­tem by drop­ping cov­er­age when they’re healthy. It also would limit how much ex­tra chil­dren with pre­ex­ist­ing con­di­tions would have to pay if they signed up dur­ing open en­roll­ment. And to give in­sur­ers an in­cen­tive to keep of­fer­ing in­di­vid­ual cov­er­age for kids, those that don’t would be hit with the same penalty that in­sur­ers cur­rently face for re­fus­ing to cover de­pen­dents: a five-year ban on of­fer­ing in­di­vid­ual poli­cies to any Cal­i­for­nian.

Feuer’s bill, which the Leg­is­la­ture re­cently passed, is a rea­son­able com­pro­mise, and Gov. Arnold Sch­warzeneg­ger should sign it. The mea­sure may not per­suade An­them and Aetna to re­verse course, but it gives their com­peti­tors a good rea­son not to join them on the side­lines.

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