Unintended Consequences: Children Lose Choices

Once again you'll need to file this in the —- ooops, I didn't foresee that happening.... Government utopians hopeful that healthcare reform would get those darn insurance companies to take care of everyone and be good citizens are waking up to find that corporations are reacting in unexpected ways.

Let's review what just happened. As we've shared with many, as of September 1st, insurance companies in Texas will be REQUIRED to take children with any pre-existing condition. Now clearly we all want children to be covered and so this is a good thing. As usual though, the blunt instrument of federal legislation is probably not the best tool. Obviously, children with pre-existing conditions (think cancer and other diseases) will cost much more than a typical healthy child to provide services.

So, as a business owner, what would you do? Well, you'd probably raise rates on ALL children because you can't discriminate between sick ones and health ones in pricing. In addition, you might try to think of ways to limit how many children with illnesses you must take. Well, Blue Cross Blue Shield of Texas is acting just as any smart business owner would do. They are in fact, raising premiums on all children. And sadly, they have taken the approach as of 9/1/2010 to stop offering policies to children on a stand-alone basis.

Why is this a bad thing? Well, think about this. You are a divorced mother of one child that has severe medical issues. You have a good job and a generous employer that pays 100% of your own health insurance, but the employer does not pay for health coverage for spouses or children. Your child's insurance coverage through your work policy would be $500-$600 a month AND if the child was added to the group policy with your small company, everyone else's premiums would go up as well. The bottom line is that you can't afford the extra cost. Since April of 2010 you've been excited to know that once September rolls around you'll have the opportunity to insure your child in Texas despite the medical condition because insurers will be required to cover the child. Well, now that September is rolling around you're discovering that you cannot apply for this coverage because you already have great coverage and aren't going to be the primary insured on the policy.

What is more ironic is that Blue Cross Blue Shield of Texas is a non-profit organization! These guys are not the evil for profit insurance company, they are the good guys! What do you expect them to do?

If you believe that these insurance companies can take on these sick children and adults and still survive in the future you are sadly mistaken. If you believe that you are not going to pay significantly more in insurance premiums in the future, you are missing the early warning signs of a rude awakening to come. Healthy and sick alike will pay much more and you can bet that companies will continue to avoid the cost and risk of these policies, leading to unintended consequences and victims in the name of healthcare reform.