I am writing today to announce the closure of the New Mexico Independent. After three and a half years of operation in New Mexico, the board of the American Independent News Network, has decided to shift publication of its news…
NM steps up as insurers curb policies for sick kids
Four of the state’s major health insurers plan to limit the number of new insurance policies they write for children with preexisting conditions, prompting the state to take action earlier this month to ensure youngsters potentially affected won’t go without health coverage.
New Mexico threw open the doors of its high-risk pool to youngsters upon learning that the insurers were, in effect, largely walking away from writing new child-only insurance policies.
The nation’s new health care law prohibits insurers from denying coverage to children under 19 with preexisting conditions, but insurance companies fear that means families with sick kids could sign up for policies right before extremely expensive treatments, leaving them with no choice but to cover the sky-high bills.
The board for the New Mexico Medical Insurance Pool voted to waive a rule requiring applicants show proof, usually in the form of rejection notices, that they are uninsurable. The action was taken to ensure the children get coverage, Deborah Armstrong, the pool’s executive director, said Monday.
“We saw the children as a class of individuals who wouldn’t get insurance coverage,” Jason Sandel, acting board chairman of the high-risk pool, told The Independent.
The insurers’ decision to severely limit new child-only policies provoked disappointment, even indignation, in some corners Monday.
“While we are proud to be offering coverage to the state’s uninsured children at this time, the current neglect of children within the private market is very unfortunate,” Sandel is quoted as saying in a news release issued late Friday.
One health care advocate had even stronger words.
“It’s hard to hear this in a country that prides itself on equality that we would fight over children with preexisting conditions,” said Barbara Webber of Health Action New Mexico, which advocates for affordable and accessible health care.
State doesn’t know how many kids will be affected
Lovelace, Presbyterian, United and Blue Cross and Blue Shield all notified the state that they intend to limit how often they will take applications for health coverage for children with preexisting conditions to once or twice a year in open enrollment periods, state officials said Monday. The notifications came during a meeting of the high-risk pool’s board Oct. 14 and 15, Sandel said.
That change is a sharp deviation from past practice in which insurers allowed enrollment all year long, and would severely limit how many child-only policies are written.
Presbyterian and Blue Cross Blue Shield could not be reached for comment Monday afternoon. The Independent previously reported on Lovelace Health Plan and its plans to allow parents to apply for child-only health policies only to one month every year.
It is unclear how many children might be affected by their decision. But state officials said the number didn’t matter.
“Whether we’re talking about one child or 1,000 children up to the age of 19 who aren’t being provided services as the Patient Protection and Affordable Care Act (PPACA) intended – these young people will be allowed access to our pool – that’s what we do,” the state’s insurance superintendent, John Franchini, is quoted as saying in last week’s news release.
Currently, premium rates for children at the New Mexico Medical Insurance Pool are $142 per month for a $500 deductible plan, according to last week’s news release. Premiums are lower for higher deductibles.
Policies will still be available in New Mexico—but parents will only be able to apply during one or two months per year
It’s unclear when the health insurers will hold their open enrollment periods. “All of them apparently want to hold their respective open enrollment periods at different times of year,” Gerald Garnder, a spokesman for the New Mexico Public Regulation Commission, told The Independent via e-mail Monday.
Franchini and members of the Insurance Division will meet with these companies next week to discuss the particulars, Garner said.
At heart in the insurers’ decision is the tug of war inherent in the insurance industry between balancing costs and spreading the risk around of pay outs due to unexpected medical costs.
Insurance is at its core based on the concept of shared risk, meaning the more people who are insured reduces the risk of catastrophic medical costs an insurer is required to pay out in certain situations. A requirement to cover already sick children could expose insurers to large medical costs, industry officials have said.
A health insurance industry representative has described the new federal provision as a powerful incentive to parents to wait until their child becomes sick before they buy insurance, potentially costing insurers money.