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Kids-only coverage at risk in reform

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Insurers already are adjusting their product offerings in anticipation of Sept. 23, the date when the first regulations take effect under the Patient Protection and Affordable Care Act.

One casualty of the reform may be the elimination of children-only health insurance products. Cox HealthPlans suspended sales of Kids First, its child-only policy, on July 28, said Vice President of Marketing Ethan Sheffield.

At issue is the reform provision that bars pre-existing condition exclusions for children, which industry officials have said would increase an insurer’s risk and result in higher premiums.

Sheffield said continuing Kids First coverage under the health reform model as it now stands would bring premium price increases of at least 65 percent, hampering the company’s efforts to offer an affordable children-only coverage option.

Cox HealthPlans’ nearly 1,200 existing Kids First customers will continue to be covered,
Sheffield said, noting the plan is only closed to new participants.

“We’re not doing this to penalize anyone,” he added. “We’re doing it to make sure that going forward, we can still continue to offer coverage to customers and do the right thing for our community and current customers.”

Children can still be covered under Cox HealthPlans policies as dependents, Sheffield said, and the company is still hoping to bring back Kids First if modifications are made to the reform legislation.

Anthem Blue Cross Blue Shield still offers children-only coverage, said St. Louis-based spokeswoman Deb Wiethop. She said the company is putting the finishing touches on its policies to comply with regulations set to take effect in September, but she declined to discuss specific changes.

Still, Kids First isn’t likely to be the lone children-only coverage plan suspended or cancelled because of reform. At least three area insurance industry experts say they’ve heard of similar products being eliminated, though they aren’t aware of specific carriers that have dropped them.

“At this point, children’s insurance, that’s your first victim, as far as an entire product line,” said Darren Coffman, president of Benefits Unlimited Inc. “You can’t blame the companies, either. When you take away their right to gauge a risk appropriately, why would you be in business?”

Travis Ford, spokesman for the Missouri Department of Insurance, said the department wasn’t aware of in-state products that were discontinued because of health reform, but he has heard that some national carriers were dropping their kids’ products. He noted that insurers aren’t required to notify the state if they discontinue selling a policy or product.

Insurers do have to file new and changed policy forms with the state to ensure that the policies comply with state and federal laws, Ford said.

“We are seeing a lot of insurers revising their policies to reflect new requirements,” Ford said.
Among the changes are the elimination of lifetime benefit limits and expanding dependent coverage to cover children up to the age of 26, said Gordon Kinne, president of third-party administrator Med-Pay Inc.

Patients will see some benefit with the new requirements, Sheffield said, noting Cox HealthPlans is incorporating preventive care – at no expense to the customer – into its policies.

“There’s not a huge cost associated with those things,” he said. “We know that the benefits we’re adding in won’t cost that much and are beneficial to the patients and the community.”

More drastic changes are likely to come in 2014, when individual and employer requirements will take effect, insurance officials said. Insurers will not be able to turn down anyone – adults included – for coverage because of pre-existing conditions, or set eligibility requirements based on factors including health status, claims experience and receipt of health care.

“Most of the drastic changes are going to be phased in,” Kinne said. “I don’t know that anyone will write an individual policy anymore.”

Kinne compares the mandate that doesn’t allow a carrier to turn down a patient, regardless of medical history, to requiring a home insurance carrier to sell insurance for a home on fire.

“Someone can go into the doctor coughing up blood and find out he has lung cancer,” Kinne said. “And he can say, ‘Hold on, I don’t have insurance. I’ll be back tomorrow.’”[[In-content Ad]]

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