New bill would restore child-only policies

The 2010 health reform law created several changes in the health insurance market, not all of them intended.

An unintended consequence of the Affordable Care Act was a halt in sales of “child-only’’ policies in Georgia and other states.

These policies are usually bought by parents who have an employer plan that doesn’t offer dependent coverage. Sometimes they’re bought by parents who can’t purchase coverage for themselves due to cost or a health condition, and who want to cover their children — but make too high an income for their kids to qualify for Medicaid or PeachCare.

When the Affordable Care Act required child-only insurance policies to accept kids with pre-existing conditions, insurance companies in the state decided to stop offering new individual policies that cover children only.

The insurance industry said that under the new requirement, a parent could wait till a child got sick before purchasing coverage. That would cause an increase in unprofitable policies and soaring costs for insurers, the industry said.

Many states have stepped in to address the loss of availability of child-only policies, either through regulation or legislation.

The latest could be Georgia, where House Bill 1166 aims to restore these policies to the private insurance market.

The measure, which passed the House Insurance Committee on Wednesday, would require insurers that sell individual health policies in Georgia to also offer child-only plans during an open enrollment period.
The legislation would allow insurers to impose a surcharge of up to 50 percent of the premium if a child has been uninsured for more than 63 days prior to the application for coverage. That would encourage parents to keep a child insured and not wait for the child to become ill to seek a policy.

The health insurance industry has signed off on the bill, said Graham Thompson, executive director of the Georgia Association of Health Plans, earlier this week.

“It’s a relatively easy fix for an unintended consequence, and will help some kids get health insurance,’’ said Cindy Zeldin, executive director of Georgians for a Healthy Future, who pushed for the legislation. “And we know how important health insurance is.’’

Georgia Watch, another consumer advocacy organization, told Georgia Health News last year that the group had fielded queries from several families looking for a policy to cover a child.

“It’s unfair that some parents are willing to pay for health insurance for their kids, and it’s not available,’’ Zeldin said.

Thompson noted the legislation would cover just one year –- 2013. The child-only bill has a Jan. 1, 2014, sunset provision.

That’s when the federal health reform law is fully implemented, if it survives court and congressional challenges. At that point, the new insurance exchanges and rules may preclude the need for child-only policies.