As national health care reform takes effect, health insurance carriers in South Carolina have halted access to new individual policies for children - a move that could leave families unable to find insurance for their healthy children, advocates said.
Starting this week, insurance companies are prohibited by law from denying plans to children 19 years old and younger who have pre-existing medical conditions.
South Carolina insurance companies said they must suspend new policies for that market because the sudden influx of sick children, and of those whose parents enroll them after learning of a major illness or accident, would drive up premiums for all policyholders.
But advocates said the suspension bucks the spirit of the law, which aims to increase insurance coverage for children.
"The decision flies in the face of what insurance companies said they would do when the law was passed to get coverage for kids with pre-existing conditions," said spokesman Avram Goldstein of Health Care for America Now, an advocacy group.
U.S. Department of Health and Human Services spokeswoman Jessica Santillo said in a statement that her department expects insurance companies to "honor the commitment" to offer coverage to children.
"Insurers shouldn’t break their promise and turn their backs on some of our most vulnerable Americans," she said.
Among the state’s insurance carriers that have suspended child-only plans or placed applicants on hold are BlueCross BlueShield of South Carolina, BlueChoice HealthPlan of South Carolina, Carolina Care Plan, United Healthcare and WellPath. Existing policies are unaffected.
Charleston resident Lane Jefferies and his family are among the dozens of South Carolinians who have been caught in the kerfuffle since the state’s carriers began suspending plans this month.
Jefferies, who sells boats for Barrier Island Marine, wanted to buy insurance for his family of four on the private market because the coverage he gets from work, at about $1,000 a month, is too expensive. Before the health care law took effect, he could have covered his family for less than half that amount, according to Jefferies’ insurance broker.
Jefferies still can find policies to cover himself and his wife, but none to cover his healthy 7-year-old son and 9-year-old daughter."I’m going to stick with the policy I have, even though I’m not wealthy and it’s $6,000 a year more than I can spend," Jefferies said.Brandi Alvarez of Mount Pleasant finds herself in a similar situation.
Her husband left a job with a development company about two weeks ago to work for a small business. When he switched jobs, the family lost its insurance coverage and planned to buy new policies on the private market.
"Our broker told us, ‘I can find plans for you and your husband, but I can’t get one for your daughter,’" she recalled.
Confused, Alvarez, explained that her 6-year-old daughter had no pre-existing conditions. She said she was floored by what the broker told her next.
"It was just the opposite of what I expected," she said. "They cannot write a policy for a perfectly healthy child."
Alvarez said her husband makes too much money for the family to qualify for state or federal assistance programs, but cannot afford the COBRA coverage from his former job. Still, they’re sticking with it. "COBRA is our only option right now," she said.
Parents of children with pre-existing medical conditions still can find coverage through Medicaid or state assistance programs, insurance brokers said.
Brokers who sells health policies for the state’s major carriers said it is unclear how long the insurance companies will keep the suspensions and holds in place.
Ann Roberson, spokeswoman for the S.C. Department of Insurance, said carriers are waiting on "additional guidance" from the U.S. Department of Health and Human Services about implementing the expanded coverage. They want to know, for example, whether an open enrollment period will be defined to prevent patients from getting coverage only after they need it, Roberson said.
Santillo, the Department of Health and Human Services spokeswoman, said the federal government would "listen to the suggestions of these stakeholders and, if necessary, issue further guidance."
South Carolina’s congressional delegation offered a chorus of criticism for both sides Thursday.
"I certainly hope the administration will provide the appropriate clarification to insurance providers so they can re-enter this market,"Republican Rep. Joe Wilson said in a statement.
Democratic Rep. James E. Clyburn said he was "disappointed the insurance companies didn’t live up to their pledge to comply with the spirit of the law."
Wesley M. Denton, a spokesman for Republican Sen. Jim DeMint, blasted the new law.
"... Premiums continue to rise and consumer choices continue to narrow," he said. "We must repeal this takeover and pass commonsense reforms that allow every American to afford, own and keep a plan that works for them."
Other states have experienced similar problems in the past week, though the number of affected states has not officially been tallied, according to spokesmen from America’s Health Insurance Plans and the National Association of Insurance Commissioners, two groups that represent insurance companies.
The affected areas are difficult to quantify because policies vary from state to state, they said.
Reach Renee Dudley at 937-5550.