HHS Clarifies Rules for Children’s Health Care Insurance Policies

On Wednesday, HHS issued a clarification of a provision under the new health reform law that requires health insurance companies to offer coverage plans to children with pre-existing medical conditions, noting that insurers are permitted to establish structured, open-enrollment periods for the plans in accordance to their respective states' laws, The Hill reports (Pecquet, The Hill, 7/29).

Impetus for Clarification

Last week, some members of the National Association of Insurance Commissioners said that several insurers had stopped writing new child-only plans or had discussed the idea because of the new law's requirement.

Under the requirement, insurers after Sept. 23 would have to honor all applications for child-only coverage, which could allow parents to enroll their children when they got sick.

Parents then could stop payments when they no longer need coverage, which insurance industry officials said would drive up medical costs and make insurers' financial risk unmanageable (California Healthline, 7/26).

Details of the Changes

In a White House blog post on Wednesday about the new HHS directive, administration officials laid out several situations in which insurers could employ an open-enrollment period for child-only coverage.

The post noted that all of the "situations assume that there are no state laws that set the timing and duration of open-enrollment periods" (Reichard, CQ HealthBeat, 7/28).

In the post, White House Office of Health Reform Director Nancy-Ann DeParle noted that although the new guidance allows insurers to "establish an open-enrollment period" for the specific plans, it also "makes clear that the administration will not hesitate to issue regulations if insurance companies unfairly limit access to insurance for children who need it most."

She acknowledged that the Obama administration was "concerned" after learning last week about insurers' plans to stop offering the child-specific coverage plans.

Industry Welcomes Rules Clarification

Karen Ignagni, president and CEO of America's Health Insurance Plans, said that the clarification would help guarantee that millions of children gain access to affordable coverage, adding that structured enrollment periods for children's coverage plans would be similar to those "used in the Federal Employees Health Benefits Program, Medicare and in employer-based coverage to minimize disruption for families, seniors and small businesses" (The Hill, 7/29).

Scott Serota, CEO of the BlueCross BlueShield Association, praised the directive, noting that BCBS has "been working closely with the administration to identify potential problems and seek solutions to ensure smooth implementation of the new health care reform law." He said the "clarification is a good example of how we can successfully implement the new law by working together" (CQ HealthBeat, 7/28).