Mass exodus from child-only policies could destabilize market

Add Anthem Blue Cross and Blue Shield to the list of insurers that will stop selling new child-only individual policies by Sept. 23, when the federal Patient Protection and Affordable Care Act takes effect, according to news reports. It joins Humana, Aetna, Cigna, United HealthCare of Colorado, the Denver Business Journal reports.

In the face of questions created by new federal mandates, health insurers are pulling out of the child-only market for individual policies, which could make the market more volatile, experts say.

If too many health plans stop offering the coverage, it will be hard to provide coverage and keep rates affordable, Kaiser Permanente Colorado officials told the Business Journal. It is the largest insurance provider that is continuing to sell child-only policies in the state.

The health reform requires insurers that offer child-only individual market plans make them available to all children, including those with pre-existing conditions whom insurers simply refused to write policies for in the past, the Dayton Business Journal reports. An Anthem statement cited an "unlevel competitive environment" to explain why it was pulling out.

WellPoint's (NYSE: WLP) Anthem Blue Cross & Blue Shield will continue to offer child-only plans in some states due to state-specific requirements.

In California, where Anthem Blue Cross--the state's largest health insure--will suspend sales of new child-only policies beginning Sept. 23, the legislature took a hardline and approved a bill that would ban insurers from the individual market in the state for five years if they stop selling new child-only policies, reports. The bill goes next to the governor's desk for signing.

"At a time when we are launching a national approach to ensure that all children have access to health care, Anthem's actions represent a step backwards," said Assembly member Mike Feuer (D-Los Angeles) in a statement.

To learn more:
- read the Dayton Business Journal article
- read the article
- read the Denver Business Journal article

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