U.S. Health and Human Services Secretary (HHS) Kathleen Sebelius is trying to shore up the child-only health insurance market, and House members have reported on adults' problems with buying coverage.
Sebelius and the House members — House Energy and Commerce Committee Chairman Henry Waxman, D-Calif., and Rep. Bart Stupak, D-Mich., chairman of the committee's oversight and investigations subcommittee — have been responding to consumer complaints about gaps in coverage access that persist despite the start of implementation of the Affordable Care Act, the legislative package that includes the Patient Protection and Affordable Care Act (PPACA).
Many reports have surfaced about insures dropping child-only health insurance programs. Health insurers say a PPACA provision that requires insurers to sell coverage for children on a guaranteed-issue basis could expose child-only plans to severe antiselection problems, by encouraging parents to pay for coverage when and only when children appear to need medical care.
Federal regulators and some state regulators have tried to address antiselection concerns by saying insurers can discourage parents from buying coverage at the last minute by making guaranteed-issue coverage available only during specific open-enrollment periods, such as annual open-enrollment months, and after major life events, such as birth, adoption or loss of other coverage.
Sebelius, a former president of the National Association of Insurance Commissioners (NAIC), Kansas City, Mo., has written to NAIC President Jane Cline, the West Virginia commissioner, to describe the steps that HHS officials believe states can legally take to keep carriers in the child-only market.
HHS officials do not think states can set up an open-enrollment period that applies only to
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children with health problems, Sebelius says.
Some insurers have asked regulators to schedule open-enrollment periods for sick children and let carriers sell child-only coverage to healthy children throughout the year, Sebelius says.
HHS officials "have concluded that the approach they advocate is legally infirm, and inconsistent with the language and intent of the Affordable Care Act," Sebelius says. "Nor would it be lawful for a state to allow denials of coverage for children based on pre-existing conditions outside of an open enrollment period."
States can establish uniform open-enrollment periods for all children under 19, Sebelius says.
The Affordable Care Act will prohibit new insurance plans from using health status information in pricing decisions starting in 2014. Up until then, states can let insurers adjust rates to reflect the cost of covering children with health problems, Sebelius says.
Sebelius says states also can:
- Discourage antiselection by making consumers pay a surcharge for dropping coverage and then reapplying for it.
