Unintended consequences: Insurers stop offering new coverage for some kids

The healthcare overhaul law, which was supposed to increase access to healthcare, may have exactly the opposite effect for some children.

Later this year, the law requires insurers to accept all children, regardless of medical condition. But insurers fear that parents will wait until their kids get sick before signing them up for coverage, which could saddle the insurers with unpredictable costs, the Associated Press reports.

This is a well-founded fear, according to the New American, which cites how people gamed the system after RomneyCare, the Massachusetts prototype for the healthcare overhaul, went into effect. Because insurers can't refuse patients for pre-existing conditions, patients often will wait until they need coverage before purchasing it, only to drop it once they are well again.

That in turn, drives up the cost of coverage for everyone else, Robert Zirkelbach, a spokesman for America's Health Insurance Plans of Washington, D.C. told the New American.

Some major health insurance companies have already stopped issuing new policies that cover children individually. In Florida, for example, UnitedHealthcare and Blue Cross Blue Shield have stopped issuing such policies.

Although the most common types of coverage for children--employer plans and government programs--will not be affected, a subset of policies that cover children as individuals may. The individual children's policies account for 8 percent of single coverage plans sold directly to consumers, AP reports.

Insurance companies and state insurance commissioners are lobbying the federal government to require an open enrollment period so that parents can get guaranteed coverage for their children only during a designated month each year. Final regulations for the new children's coverage are due before Sept. 23.

To learn more:
- read the Associated Press piece
- read the article in the New American
- read a blog from Investor's Business Daily