Health & Welfare | Daily Report

Rather than implement a major portion of federal health reform, several big health insurers are saying they will no longer cover ailing children meant to benefit under the new law.

Part of the Obama administration's health reform law kicks in tomorrow, mandating insurers to cover children even if they have pre-existing conditions like asthma or diabetes when they seek coverage.

In response, several insurers have taken a defiant stance, saying they will simply stop offering policies tailored to kids. The reason is financial, and Politico has more on that:

Anthem announced Friday that it will no longer write child-only policies after Thursday, citing the “unlevel competitive environment” created by the law. Aetna plans to leave the market in 26 states and the District of Columbia as of Oct. 1 and several other states later this fall. Cigna, Humana and several Blue Cross Blue Shield companies have already stopped writing the policies.

“We would love to stay in the market,” said G. William Hoagland, vice president of public policy at Cigna. But “you can’t have guaranteed issue for this population and be the only one out there. You can’t make it work financially.”

The news disheartens Kelly Hardy, associate director of Children Now, an Oakland-based children’s advocacy group.

“It’s really disturbing that insurers can’t figure out how to offer child only-plans and stay at the negotiating table instead of abandoning children,” she said during a Tuesday conference call about health reform and pending California health laws.

The Washington Post reported that it was unclear how many children would be affected:

Child-only plans represent only a small share of the non-group plans available on the individual market – with somewhere between 100,000 and 700,000 children currently receiving such coverage, according to administration officials.

The Post also reported that insurers will not stop offering plans to children in states that have special requirements, such as New York, Ohio and Virginia.

California could join those states if Gov. Arnold Schwarzenegger signs a bill that’s now on his desk for consideration.

The bill, AB 2244, by Assemblyman Mike Feuer, D-Los Angeles, would ban insurers from offering individual insurance plans in California for five years if they refuse to issue kid-only policies.

Feuer issued a statement Friday about Anthem’s plans to stop issuing child-only plans:

“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. By threatening to drop child-only policies in California, the company jeopardizes the health of families and children,” Feuer said.

Other aspects of health reform are also set to take effect tomorrow, such as a mandate that insurers extend policies to young adults up to 26 years old, and to end the practice of rescinding policies to sick patients. The Kaiser Family Foundation released a lively and informative video Tuesday that breaks down how the sprawling health reform law is meant to work.

The California-based consumer advocacy group Health Access issued a report Tuesday [PDF] on the newest impacts of the health reform law and about health-related bills burning a hole on the governor's desk.

I've also written about some of those, including efforts to set up a health insurance exchange that will negotiate on behalf of its members and a bill that would end Medi-Cal payments for botched procedures.