Insurance Industry Agrees to Fix Kids Coverage Gap

If you can't beat them, join them.

After nearly a year battling President Barack Obama and congressional Democrats over the healthcare overhaul, the insurance industry says it won't block the administration's efforts to fix a potentially embarrassing glitch in the new law.

In a letter to Health and Human Services Secretary Kathleen Sebelius, the industry's top lobbyist said Monday insurers will accept new regulations to dispel uncertainty over a much-publicized guarantee that children with medical problems can get coverage starting this year.

Quick resolution of the doubts was a win for Obama — and a sign that the industry has no stomach for another war of words with a president who deftly used double-digit rate hikes by the companies to revive his sweeping healthcare legislation from near collapse in Congress.

"Health plans recognize the significant hardship that a family faces when they are unable to obtain coverage for a child with a pre-existing condition," Karen Ignagni, president of America's Health Insurance Plans, said in a letter to Sebelius. Ignagni said that the industry will "fully comply" with the regulations, expected within weeks.

The industry still has plenty of other objections to the new healthcare law, including concerns that it will raise premiums and skepticism that it will achieve its stated aim of covering 95 percent of eligible Americans.

On coverage for kids, however, there will be no quibbling. Ignagni's letter to the administration followed a sternly worded missive from Sebelius to the industry earlier in the day. The administration's top healthcare official forcefully tried to put an end to questions about the law's intent and wording.

"Health insurance reform is designed to prevent any child from being denied coverage because he or she has a pre-existing condition," Sebelius wrote to Ignagni. "Now is not the time to search for nonexistent loopholes that preserve a broken system."

Sebelius specified that a child with a pre-existing medical problem may not be denied access to parents' coverage under the new law.

Furthermore, insurers will not be able to insure a child but exclude treatments for a particular medical problem.

"The term 'pre-existing condition exclusion' applies to both a child's access to a plan and his or her benefits once he or she is in the plan," Sebelius wrote. The new protections will be available starting in September, she said.

The fine print of the law was less than completely clear on whether kids with health problems were guaranteed coverage starting this year — as Obama had repeatedly claimed in extolling the legislation that he signed last week.

If the problem had persisted, some parents and their children may have had to wait a long time for coverage. The law's broad ban on denying coverage to any person on account of a health condition doesn't take effect until 2014.

The problem on the issue of covering kids was that the law could also be interpreted in a more limited way.

Narrowly read, it seemed to say that if an insurance company accepts a particular child, it cannot write a policy for a child that excludes coverage for a given condition. For example, if the child has asthma, the insurer cannot exclude inhalers and respiratory care from coverage, as sometimes happens now.

But that meant the company could still turn down the child altogether.
Indeed, House and Senate staffers on two committees that wrote the legislation said last week it stopped short of an ironclad guarantee.

House leaders later issued a statement saying their intent in writing the legislation was to provide full protection.