We Probably Didn't Need Those Child-Only Health Insurance Policies Anyway


Today's entry from the No One Could Have Predicted! File is a new rule for health insurers scheduled to take effect in just a few days on the PPACA's six-month anniversary. Because health insurance is For The Children, and because Democrats putting together the new health care law wanted new consumer benefits to trumpet in the weeks prior to the November election, they built a provision into the law telling insurers that, starting this Thursday, September 23, they could no longer turn down child for a child-only health policy because of preexisting conditions. In effect, though, that means that children who are already sick won't be turned down, which, yes, sounds very nice — and would be if it were feasible and not likely to lead to insurance gaming.

Here's the problem: It also means that parents attempting to enroll their children in these policies might have the option to wait until the last minute to pick up coverage and then drop that coverage immediately thereafter. There's an enrollment period that's supposed to limit jumping on and off insurance, but as Politico notes, the rules don't "address how to cover anyone — healthy or sick — outside the open enrollment period if, say, a child's parent loses his or her job and coverage." Consequently, the article explains, "insurers are worried that children — or, more likely, their parents — might apply for coverage literally on the way to the hospital or doctor's office and cancel it once treatment is complete." That would drive up expenses for child-only policies, which would push more people out of the insurance pool, which would further drive up coverage costs, and so on and so forth spinning faster and faster until the out of control merry-go-round has thrown off just about everyone.

And so at least six large insurers have decided to stop offering these policies entirely.

Naturally, liberal health care advocates aren't happy, and think the insurers are dissembling, or at least being very mean. Ethan Rome, a spokesman for the ObamaCare-Or-Busters at Health Care for America Now, has already managed to declare to a reporter at The Washington Post that for insurers "to blame their appalling behavior on the new law is patently dishonest." But if it's dishonest to say that the change is a reaction to the new rules, then should we trust Rome? In another article, he says straightforwardly that the decision to stop offering those policies was, well, a response the new regulations: "They [insurers] don't like the rules, so they're going to take their ball and go home," he wrote at The Huffington Post.

In some ways, it's a small change: Child-only policies currently comprise less than 10 percent of the individual market, and insurers will still cover children, including those with preexisting conditions, in policies that aren't strictly child-only. Existing child-only policies won't be canceled. But it's indicative of one of the new health care law's fundamental contradictions: Insurers are expected to both abide by new rules, which could prove costly, and not significantly change their prices or services in response to them. And it suggests how easy it is for well-meaning policies to backfire. A provision intended to ensure that children have unimpeded access to health insurance coverage has ended up resulting in fewer options for covering children's health.