HHS tightens enrollment period for individual coverage for children

Some health plans said they would stop offering individual plans if enrollment remained open throughout the year.

By Doug Trapp — Posted Aug. 11, 2010

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Parents will be able to enroll their children with preexisting conditions in individual market coverage, but only at certain times of the year, according to a clarification from the Dept. of Health and Human Services.

The national health reform law ends health plans' ability to deny coverage based on a person's health status or preexisting conditions. The regulations will be fully phased in by 2014, but some of the rules -- including the children's coverage regulation -- will take effect after Sept. 22, 2010.

Critics of the health insurance industry applauded those rules when Congress and President Obama enacted the national health system reform law on March 23.

But some major health insurers reacted by threatening to get out of the business. Insurers were concerned that parents simply would wait until their children became sick to enroll in individual coverage, driving up costs. Health plans told regulators in multiple states this summer that they would stop offering individual market plans for children. For example, Aetna, Blue Cross and Blue Shield of Florida, and a UnitedHealthcare subsidiary told Florida Insurance Commissioner Kevin McCarty they would not issue new individual market policies for children.

The Obama administration reacted by clarifying on July 27 that insurers will be able to limit children's enrollment in individual market plans to specific annual periods of possibly a month or more. The administration and states will monitor the plans to ensure that they are not restricting enrollment inappropriately.

The HHS regulations do not affect group and individual health plans that existed on March 23 but will apply to health plans that are new or significantly changed after Sept. 22.

Health insurer associations applauded the HHS clarification. Robert Zirkelbach, spokesman for America's Health Insurance Plans, said the administration's decision will help ensure that millions of children have access to affordable health care coverage.

"For years, structured enrollment periods have been used in the Federal Employees Health Benefits Program, Medicare and in employer-based coverage to minimize disruption for families, seniors, and small businesses," Zirkelbach said.

Scott P. Serota, president and CEO of the BlueCross BlueShield Assn., said his association is gratified that the Obama administration listened to concerns that people would wait until they were sick to get coverage -- a type of adverse selection.

"Today's clarification is a good example of how we can successfully implement the new law by working together," Serota said.

Blue Cross and Blue Shield of Florida will continue issuing individual coverage for children, according to Jack McDermott, spokesman for the Florida Office of Insurance Regulation. However, Aetna still intends to stop offering solo coverage for children on Oct. 1, according to McDermott. A spokeswoman for UnitedHealthcare subsidiary Golden Rule said the company continues to issue individual plans for children in Florida but offered no prediction on what the company would do in the future.

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