Update to CO insurers stop selling child-only policies – blame health control bill:
The Denver Business Journal reports:
State Sen. Morgan Carroll is warning insurers in Colorado to return to the child-only individual health care market or face a “very good” chance she or another Democrat will introduce legislation come January compelling them to do so.
Summary of this issue: The federal health control bill (HR 3590) requires insurers to sell child-only policies to all parents who want them, at a price that does not reflect the kid’s health status. These insurance price controls are known as “community rating.” This means parents could wait until the child is sick to buy the policy. In attempt to remedy this, the Colorado Division of Insurance has ordered two month-long open enrollment periods each year, so parents could not enroll whenever they want.
Even if this is effective, it’s bad news for sick kids with child-only policies. Since the price controls prohibit the insurers from risk-rating premiums, they lose money whenever they sell a policy to a child with a pre-existing condition correlated with expensive claims in the future. So insurers respond by trying to attract the healthy and avoiding the sick.
