So what’s the deal with children and pre-existing conditions and the new health care reform law? There’s a lot of confusion out there, and even after several hours of reading on the topic, I’ll admit to still being a bit confused.
A lot of websites are explaining that six months after the bill was signed into law, health insurance companies won’t be able to exclude children with pre-existing conditions. But I don’t think it’s really that simple. A very informative Kaiser Family Foundation summary details the differences between the House Bill (HR3962), the Senate Bill (HR3590) and the final bill (HR4872). For both the Senate bill and the final bill, the summary notes that the bills would “prohibit pre-existing condition exclusions for children (effective six months following enactment).” But others aren’t so sure. A recent article in the Grand Junction Sentinel notes that “The new law allows insurance companies to refuse new coverage to children until 2014 because of a pre-existing medical problem” – that’s according to Karen Lightfoot, spokeswoman for the House Energy And Commerce Committee, one of the primary congressional panels involved in writing the bill.
The best explanation I’ve found so far is in this Associated Press article. Basically, it looks like health insurance companies will no longer be able to place pre-existing condition exclusions on new policies issued for children, starting this year. But there is apparently no requirement that the policies be issued in the first place if the child has a pre-existing condition. That requirement wouldn’t happen until 2014, when it will apply to everyone, regardless of age.
When we first started working in the health insurance industry, pre-existing condition exclusions were a pretty common underwriting action, used by most of the major carriers in Colorado. Over the years, many of the carriers we work with have moved away from exclusions and started using rate increases instead. So for example, a person with asthma who applied for a policy ten years ago might have been offered a policy with an exclusion on asthma. But if that person were to apply today, many of the most popular carriers might offer a policy with coverage for asthma, but with a higher premium than the base rate. There are still several carriers who use exclusions, but it’s no longer the standard industry practice in the individual health insurance market in Colorado. A decade ago, prohibiting pre-existing condition exclusions in the individual health insurance market would have had far more of an impact that it will now.
Nothing I’ve seen in all my reading today indicates that the practice of charging a higher initial premium to people (adults or children) with pre-existing conditions will be impacted by the new health care reform law. If I’m understanding the bill correctly, it looks like people (adults and children) will still be subject to full medical underwriting until 2014, and can still be declined for coverage until that time. It appears that policies that use rate increases rather than exclusions won’t be impacted at all, and policies that use exclusions will still be able to decline applicants, including children, until 2014.
I’m still studying the ramifications of this part of the reform law, and will update with more information as I find it. Until then, if you have more details to add, please do so in the comments.