Children with Pre-Exisiting Conditions to Wait Longer for Universal Health Coverage

Published: Mon 29 Mar 2010

Thomas Kristoffersen

Only days after President Obama signed the health care reform bill into law, health insurers are already contending that, temporarily, they do not have to offer one of the benefits that the president has referred to as a cornerstone of the law-coverage for some children with pre-existing conditions.

Addressing a health care rally on March 19 in Northern Virginia, President Obama said, "Starting this year, insurance companies will be banned forever from denying coverage to children with pre-existing conditions."

The writers of the law argue that they intended to prohibit all forms of discrimination against kids with preexisting conditions like birth defects, diabetes, asthma, orthopedic issues, cystic fibrosis, leukemia, and sick-cell disease. The aim, they say, was to offer these children access to health insurance and a full array of benefits once they have a medical plan.

Ambiguous Verbiage

To health insurers, the wording of the law is unclear.

Health insurance companies concur that if they offer insurance to a child, they have to cover preexisting conditions. But, they argue, the law does not compel them to underwrite insurance for that child, and it does not promise the "availability of coverage" for all until 2014.

William G. Schiffbauer, an attorney whose clients include employers and medical insurance corporations, said: "The fine print differs from the larger political message. If a company sells insurance, it will have to cover pre-existing conditions for children covered by the policy. But it does not have to sell to somebody with a pre-existing condition. And the insurer could increase premiums to cover the additional cost."

Democrats in Congress were livid when they found out that health insurers took issue with their interpretation of the law.

"The concept that insurance companies would even seek to deny children coverage exemplifies why we fought for this reform," explained Representative Henry A. Waxman, a Democrat from California and the Energy and Commerce Committee chairman.

Senator John D. Rockefeller IV, a West Virginia Democrat and Senate commerce committee chairman, said, "The ink has not dried on the health insurance reform bill, and already some deplorable health insurance companies are trying to duck away from covering children with preexisting conditions. This is outrageous."

Thorny Issue

The preexisting-condition issue is just one of many that federal officials are dealing with as they prepare to enforce the law, with a deluge of new rules, brochures, and official guidance to inform the public. Their choices will have momentous practical implications.

Health insurers claim they frequently limit coverage of preexisting conditions on individual policies. As a result, a health insurer might provide coverage to a family of four, including a child with diabetes, but exclude treatment of the child's condition from the policy, for example.

The new bill says that medical plans and health insurers providing group or individual coverage "may not impose any preexisting condition exclusion with respect to such plan or coverage" for children under 19, beginning in "plan years" that start on or after September 23, 2010.

However, health insurers claim that until 2014, the law does not compel them to underwrite policies at all for the family or the child. In health insurance terms, the bill does not include a "guaranteed issue" clause before 2014.

Consumer advocates are concerned that rather than refusing to cover treatment for a certain preexisting condition, a health insurance company might just deny coverage for the family or the child.