Once President Obama signed into law the health care
reform bill, we all started to dig a little deeper into what the provisions
mean for those in the “real world.”
One issue that has risen to the top is untangling the new rules
governing when insurance companies have to cover sick children. So, let’s break
down what the bill does.
Soon children with employer-based insurance no longer can
be subject to pre-existing conditions. For example, a child with asthma who is
on a parent’s employer plan cannot be denied coverage for services during any
length of time related to his/her condition. This provision will be applicable
in a new health plan year beginning after September 23rd. (Note: this specific
change will not apply to children currently in individual market plans.)
The question many are asking is “what about a child that
is not currently insured?” While the current legislative language is not clear
on this issue, the White House has provided assurances that HHS will issue
regulations to address it. HHS spokesman Nick Papas stated:
“… the secretary of HHS is preparing to issue
regulations next month making it clear that the term ‘pre-existing exclusion’
applies to both a child’s access to a plan and his or her benefits once he or
she is in the plan for all plans newly sold in this country six months from
today.”
With this clarification, a new health plan would not be
able to deny coverage for a child under either an employer or individual plan
because of a pre-existing condition. For families with limited or no options to secure coverage right now when their child is sick, this change cannot come soon enough.
While this is all good news for families, how the insurance industry responds to these new protections for children will also be
critical. Specifically, since the provision to limit insurers from charging
different premiums based on health status doesn’t go into effect until 2014, we
need to monitor whether insurers will attempt to place the burden on families
and raise premiums once these changes go into effect.