United Healthcare has stopped offering child-only insurance policies as of last week. Other companies may follow suit as the new mandates for guaranteed coverage for children and minimum 80% loss ratio are going to kill companies that continue offering the policies:
As of the end of April 2010, United Health One (the individual market subsidiary of Golden Rule/United Healthcare) has decided to discontinue offering health insurance to children in response to the new mandates under the recently signed Patient Protection and Affordable Care Act. Children will still be able to get insurance as a dependent under an adult who is insured on the same plan, but parents will no longer be allowed to purchase child-only policies.
The new law states that by September 2010, children can no longer be denied for coverage based on pre-existing conditions. However, that assumes that the insurance company is offering to insure them in the first place. If the company will not offer any coverage, the law does not make any difference. Meanwhile, insurable children are penalized by the new law as it may severely limit their choices between companies and plans if other insurance companies follow the same path.
The healthcare bill was supposed to expand coverage to millions of uninsured Americans, increase choice and competition, and lower costs. Now, many of the provisions are coming into effect and causing the complete opposite – less coverage availability, less choice and competition as smaller companies leave the market (mainly due to minimum loss ratio requirements), and increased costs for provisions guaranteeing no cost-sharing for preventative care and guaranteed coverage for children. As we all know, nothing in life is free, and this may only be the beginning of what’s to come.
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