Regence BlueShield, one of the state’s largest health insurers, will no longer offer child-only individual plans, a move that state insurance officials fear may trigger other insurers to drop similar policies.
The Regence decision comes as regulations contained in the new federal health-care overhaul prohibit insurers from refusing coverage to children with pre-existing medical conditions.
Regence, in a statement, said the move affects only new policies and that it is not dropping the 2,500 children it currently insures under such policies.
The insurer’s decision, effective Oct. 1, comes after days of discussions with insurance regulators, said Insurance Commissioner Mike Kreidler, who said his office tried to make regulatory concessions and strongly objects to Regence’s “precipitous action.”
“The bad guy here is Regence,” Kreidler said. “It didn’t have to take this action.”
Kreidler’s office adopted an emergency rule last week allowing health insurers to enroll children in individual plans without a health screen for pre-existing conditions during a special open-enrollment period.
The rule was intended to make sure that parents don’t insure kids only when they need expensive health services and drop the policies when they don’t. That can cause a spiral of increasing costs and rising premiums, with the effect that only the sick enroll.
Kreidler said his office intended that insurers would be prohibited from screening children for pre-existing conditions only during the special enrollment period, but would be allowed to screen if parents enrolled kids during the rest of the year.
But federal regulators put the kibosh on Kreidler’s plan, saying they didn’t have the flexibility to allow insurers to screen kids at any time during the year. They said if a company offered child-only policies, it had to take all kids, all the time.
Many insurers across the country reacted to the new federal regulations by dropping such policies. Major health insurers in other states began dropping the policies early this summer, in advance of the mandate, which took effect Sept. 23.
But Kreidler said Washington state is somewhat different, in that individual policies often are sold to the whole family, including children. Those who buy child-only policies might be people who can’t afford full-family coverage, or those workers whose employers don’t offer dependent coverage, forcing them to buy child-only coverage.
Kreidler said the open-enrollment period instated last week by his office was intended to keep Regence and other carriers “in the market” offering child-only policies.
Even considering federal regulators’ inflexibility on the new rules, Kreidler said he believes the open enrollment period would limit insurers’ risk. He wanted Regence to wait and see how the federal regulations and open enrollment period would play out before deciding whether to stop selling policies.
“Their overreaction will seriously harm Washington families,” he said.
Regence, in a statement, said the company has covered children for 93 years and will continue to do so. “Our experience tells us the right thing to do is provide coverage to the entire family, not just children.”