Health and Human Services Secretary Kathleen Sebelius wrote to the head of the insurance industry’s lobbying arm yesterday warning against efforts to continue to deny coverage to children with pre-existing conditions. Excerpt from the letter, which you can download as a pdf file at Greg Sargent’s blog:
Health insurance reform is designed to prevent any child from being denied coverage because he or she has a pre-existing condition. Leaders in Congress have reaffirmed this in recent days in the attached statement. To ensure that there is no ambiguity on this point, I am preparing to issue regulations in the weeks ahead ensuring that the term “pre-existing condition exclusion” applies to both a child’s access to a plan and to his or her benefits once he or she is in the plan. These regulations will further confirm that beginning in September, 2010:
*Children with pre-existing conditions may not be denied access to their parents’ health insurance plan;
*Insurance companies will no longer be allowed to insure a child, but exclude treatments for that child’s pre-existing condition.
I urge you to share this information with your members and to help ensure that they cease any attempt to deny coverage to some of the youngest and most vulnerable Americans.
A spokesperson for House Speaker Nancy Pelosi sent Sargent the following statement:
The intent of Congress to end discrimination against children was crystal clear, and as the House chairs said last week, the fact that insurance companies would even try to deny children coverage exemplifies why the health reform legislation was so vital. Secretary Sebelius isn’t going to let insurance companies discriminate against children, and no one in the industry should think otherwise.
Let’s hope this works. I wouldn’t be surprised to see insurance companies challenge the new regulations in court. They must have been counting on that loophole to save them money during the next few years.
UPDATE: David Dayen is probably right about the insurance companies’ motives here:
You can pretty much figure out AHIP’s game here. With no restrictions on cost until 2014, the industry can raise their premium prices almost at will. Even the bad publicity suffered from that 39% rate hike of Anthem Blue Cross [of California] plan has not stopped that scheduled increase from taking effect in May. And when outrage is expressed by families facing double-digit rate hikes, AHIP will clear their throats and blame the pre-existing condition exclusion for children, forcing the poor insurance companies to take on a sicker risk pool and raise prices to survive.
Except covering kids is fairly cheap to begin with. And the universe of kids with a pre-existing condition who aren’t covered through SCHIP, Medicaid, or an employer plan is extremely small. So by making a big issue of this, AHIP potentially sets up large rate hikes in the 2010-2014 period that aren’t at all justified.