Insurers find loophole in health bill, say they don't have to cover sick kids

By Sahil Kapur
Raw Story
Mar. 29, 2010

Democrats said their health care legislation would provide greater medical security to those in need. But it appears to fall short on protecting arguably the most vulnerable demographic: sick children.

Insurance companies wasted no time after the bill was passed to unearth a loophole that allowed them to deny coverage to children with pre-existing illnesses for the next four years.

According to the New York Times, "Insurers agree that if they provide insurance for a child, they must cover pre-existing conditions. But, they say, the law does not require them to write insurance for the child and it does not guarantee the 'availability of coverage' for all until 2014."

"The fine print differs from the larger political message," William G. Schiffbauer, an attorney who represents insurance companies, told the Times. "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."

While the bill precludes insurers from denying care to children who are already accepted for coverage, it allows them to refuse a policy to children under 19 from the outset, until 2014 when additional regulations kick in.

The plight of individuals with prior sicknesses, who have been systematically alienated from the health care system, has been a core emotional component of the bill's lengthy deliberations.

The bill's architects say their goal was to ensure health coverage for children regardless of health status, and were livid when they discovered that insurers are plotting to exploit their mistake.

"The ink has not yet dried on the health care reform bill, and already some deplorable health insurance companies are trying to duck away from covering children with pre-existing conditions," said Sen. John Rockefeller (D-WV), one of the senate's most ardent backers of reform. "This is outrageous."

The Associated Press reported on the ambiguity Wednesday, noting that Obama administration officials -- who promised that children would attain such a protection under the legislation -- are working to bridge the gap.