Wednesday, September 22, 2010

Medical Insurers Run Backwards From Insuring Kids

They cite unexpected costs too high to surmount and still make money

Parts of the new Health Care Reform Act of 2010 take effect Thursday.

One predictable development raised its head immediately.

As usual, even if you've got the money, you still can't buy it because it's not for sale.

An estimated 500,000 kids without health insurance will be affected by a decision by major medical carriers to stop selling new policies for children only.

Aetna and Blue Cross said they will stop selling children-only policies as soon as the new law goes into effect tomorrow because they just can't make any money under the new terms of doing business. The companies said they will begin their new policy in California, Illinois, Florida and elsewhere immediately. In ten states including Texas, Cigna announced it will also stop selling the policies. "We made a decision to stop offering child-only policies to ensure that we can remain competitive in the 10 markets where we sell individual and family plans," said Cigna spokeswoman Gwyn Dilday. "We'll continue to evaluate this policy and could reconsider changing this position as market dynamics change."

Kids who are already covered by the parents' employers would not be affected, but those who are not already covered, especially those with pre-existing conditions, will be passed by because of the huge increase in the cost of doing business.

“Unfortunately, this has created an un-level competitive environment,” according to a statement issued by California's largest for-profit insurer, Anthem Blue Cross.

Health care advocates, lawmakers who voted for Obamacare and regulators are angered by the move because it will obviously place a huge new strain on such public insurance programs as MediCal, which is intended to serve the poor.

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