Nebraska left with no child-only insurance policies
By Martha Stoddard
WORLD-HERALD BUREAU
LINCOLN — Jennifer Piatt normally isn’t much of a gambler.
But the Creighton University law student has been forced to take a chance on her 9-year-old daughter’s health this year.
“I’m just hoping she doesn’t get sick,” said Piatt, who added that she can afford and was willing to purchase a private policy for Isabelle.
Piatt’s plight stems from a provision of the federal law that bans insurance companies from denying or limiting coverage of children with pre-existing health conditions.
The provision took effect Sept. 23, and within weeks child-only policies disappeared from the market in Nebraska, Iowa and many other states.
A number of state governments have since addressed the problem and restored child-only policies. Iowa is in the process of bringing about a solution.
But Nebraska’s insurance commissioner doesn’t believe he has the authority for similar action. An eleventh-hour move by an Omaha senator to legislatively address the issue failed.
Child-only policies are a small part of the health insurance market — Blue Cross and Blue Shield of Nebraska, the state’s largest insurer, had only 1,300 such policies last year. But they are important option for children who aren’t covered by a parent’s policy.
Doris Preston had hoped to buy an individual policy for her great-grandson, Alfred, that would start in June when she retires and goes on Medicare.
The 4-year-old, whom Preston adopted two years ago, has been covered on her employee plan.
But like Piatt, Preston found that there are no child-only policies available.
She decided to buy a family policy — paying more than twice the amount that a Medicare supplement and a child-only policy would have cost.
“I don’t see where we have a choice,” Preston said. “It’s either that or he doesn’t have health insurance.”
Nebraska Insurance Commissioner Bruce Ramge called the collapse of the child-only market “an example of the unintended consequences of this imperfect law.” He said he is concerned about the problem but limited in what he can do.
Nebraska law does not give him authority to set statewide open-enrollment periods or require insurance companies to offer child-only policies, he said.
Sen. Jeremy Nordquist of Omaha said he was disappointed that Ramge has been unwilling to take administrative action. He said Ramge should have suggested legislative changes if he believed he wasn’t authorized to fix the problem.
Nordquist questioned whether opposition to the federal health care legislation led state officials to drag their feet on solving the problems with child-only coverage.
“I wonder at what point this consequence (of federal reform) goes from ‘unintentional’ to ‘intentional?’” he asked.
Ramge said companies dropped child-only policies out of fear of adverse selection — that parents wouldn’t buy insurance until after their children became sick. Such a practice would drive up costs for insurance companies and work against the pooling of risk.
Federal officials contend that insurance companies have reneged on their commitments to “make pre-existing conditions exclusions a thing of the past for children.”
In an October letter, U.S. Health and Human Services Secretary Kathleen Sebelius called the companies’ actions “disappointing.”
She urged all states to take action to preserve insurance coverage for children, as some already have done.
California requires companies to offer child-only policies if they want to sell individual adult policies. Colorado established statewide open-enrollment periods, which prevent parents from waiting to purchase policies until their children become ill.
Iowa is in the process of adopting a regulation requiring an open-enrollment period for child-only policies. The proposed period would be from June 1 through July 15, starting this year.
Angela Burke Boston, assistant state insurance commissioner, said insurance companies in the state agreed to re-enter the market if there were a common open-enrollment time.
“It is designed to address the concerns those companies had about adverse selection,” she said. “This was the solution that all of us arrived at.”
Ramge said he lacks authority under Nebraska law to take similar action and questioned whether such a move would help the situation.
He has informally explored open-enrollment periods, premium adjustments and other options with Nebraska insurance companies, he said, but the companies remain reluctant about re-entering the market.
Ramge dismissed the idea of requiring companies to sell child-only policies if they want to participate in the individual adult market.
“The department does not believe it is appropriate to mandate that insurers issue certain types of policies,” he said.
Representatives of two major Nebraska insurers said they are willing to sell child-only policies if the risks are shared.
Blue Cross was the last in the state to stop selling child-only policies.
“We’re willing to get back in, but it has to be a level playing field,” said Michaela Valentin, a company lobbyist.
Jessica Kostner, a spokeswoman for United Healthcare, another major Nebraska insurer, responded similarly.
“We support efforts to ensure that children have access to health insurance coverage in a competitive marketplace and support solutions that share the opportunity for all carriers to participate in offering child-only coverage,” she said.
Coventry Health Care didn’t respond to requests for comment.
State lawmakers got into the discussion late because they did not realize the extent of the problem, Nordquist said.
They introduced no legislation on the issue, but State Sen. Gwen Howard of Omaha proposed an amendment on an unrelated insurance bill. The amendment, which would have required companies to offer child-only policies, was ruled out of order.
With bill introduction over for this year, it could be months before the problem is resolved. Nordquist has introduced a resolution calling for an interim study.
Meanwhile, Ramge and the insurance company representatives suggested that parents buy a family policy if they want coverage for a child.
Medicaid and Kids Connection, Nebraska’s children’s health insurance program, are options for low-income families.
Children with pre-existing health conditions may qualify for the federal or state high-risk insurance pools. It’s unclear if the state pool can take children without medical problems.
Piatt said none of those options work for her daughter.
As a student, Piatt said she doesn’t make enough money for a good family policy. Isabelle doesn’t qualify for Medicaid because she gets Social Security benefits and worker’s compensation payments stemming from her father’s death.
And she is healthy, so she doesn’t fit in the high-risk pools.
Piatt is covered by student insurance that she said would be virtually worthless for her daughter because the coverage is extremely limited. In any case, Piatt missed the deadline to add her daughter to her policy because she was searching for a child-only policy.
“I’m not asking for state assistance or financial contributions,” Piatt said. “I’m simply asking to buy a private product with our own money to ensure my daughter has coverage.”