Health Insurance Companies Really Hate Your Sick Children

The health insurance industry is generally known for its efficiency, generosity and — of course — for its customer-first attitude. That’s why it comes as such a shock that several of the more beloved insurance institutions like Wellpoint, Aetna, Cigna and United Healthcare have decided to stop selling you insurance policies for your sick children.

These companies say the have opted to put a halt to selling child-only policies rather than comply with a new federal law forbidding them from rejecting coverage for children under the age of 19, even if they have (here’s the sticking point) a pre-existing medical condition.

Insurance companies have seen sales of child-only policies increase in recent years as more employee-based health plans cut coverage of dependents. But now that the insurers won’t be able to say no to kids with costly conditions, many have decided to cease selling new child-only policies.

From the L.A. Times:

Insurers said they were acting because the new federal requirement could create huge and unexpected costs for covering children. They said the rule might prompt parents to buy policies only after their kids became sick, producing a glut of ill youngsters to insure. As a result, they said, many companies would flee the marketplace, leaving behind a handful to shoulder a huge financial burden.

“Unfortunately, this has created an un-level competitive environment,” said a rep for WellPoint’s Anthem Blue Cross, which recently stirred up a hornet’s nest by jacking up rates on individual policy holders in California.

We don’t know why the insurance companies are so worried about having to pay for kids with pre-existing conditions. After all, insurers have had no moral quandaries with practicing recission on policy holders withbreast cancer or HIV.

White House Press Secretary Robert Gibbs responded to the news with expected exasperation: “It’s obviously very unfortunate that insurance companies continue to make decisions on the backs of children and families that need their help.”

Big health insurers to stop selling new child-only policies [L.A. Times]

New healthcare law kicks in today [Houston Chronicle]