JEFFERSON CITY — Three new provisions affecting children's health care coverage in Missouri and across the country will hit insurance companies as a series of provisions of the federal health care law take effect this week.
The changes, stipulated by the federal law, take effect Sept. 23 for new and renewed policies. Among the list of this month's changes are three provisions that significantly impact child health care, said Travis Ford, communications director for the Missouri Insurance Department.
The law mandates that:
- Children cannot be excluded based on a pre-existing condition, and companies must provide coverage for the pre-existing condition.
- Preventive services for both children and adults — including check-ups, screenings and vaccinations — must be covered without extra costs to the consumer.
- Children may stay on a parent's plan until age 26.
A few other provisions took effect earlier this year, including a government-provided insurance plan for those who were uninsured because of pre-existing conditions.
Although critics had warned that the mandated coverage requirements would cause insurance companies to drop offering various types of plans, the state's leading insurance organization said that was not happening.
"They're all working to comply," said Brent Butler, governmental affairs director for Missouri Insurance Coalition, a state association that represents the state's insurance companies. "Nobody is saying, 'Well, I'm not going to do that.' That's not an issue.
"It will have some costs and impacts, but the companies are figuring that into their processes and will work on that."
These changes come exactly six months after President Barack Obama signed the federal health care law.
Covering pre-existing conditions
For a child under the age of 19, an insurance company will be prohibited from refusing coverage because of a pre-existing medical condition such as diabetes or asthma.
"One of the biggest ones is that insurers will be forbidden from having any kind of restriction on the coverage of pre-existing conditions for kids," Ford said. "So an insurer cannot refuse to add a child to a policy or add a policy to a kid because of a pre-existing medical condition."
This is a complete turnaround from traditional insurance company practices, Butler said.
"Generally it's not covered because if you buy a policy, you don't cover what kind of symptoms you already have when you buy the policy," he said. "It's sort of like you wouldn't be able to buy automobile insurance to cover the accident you just had — that's kind of the theory."
He said insurance companies deny coverage of pre-existing conditions because their job is to cover risk, not known costs. Butler said he expects the cost of all child health care plans to increase after Sept. 23.
"The reason that's expensive, or it can be expensive, is you're talking about kids with ongoing health costs," Butler said. "And now you're throwing them into the mix, so to speak.
"When a company would determine what rates to try to get out, they would spread (the additional cost) across children in general, so everybody's rates for children will have to go up to account for that."
Butler said he doesn't know how by much rates will need to increase to cover costs for all children's conditions.
"It's really not insurance; it's prepaid health care. That's why it's so expensive," he said.
The Insurance Department does not have any information about future rate changes since Missouri's insurance laws don't require companies to file their rates with the state, Ford said.
Ford also said he does not know of any insurance companies in the state that are cutting child health coverage to avoid the cost of covering pre-existing conditions or the penalty for not creating children's policies.
"I've heard reports of that happening around the country," Ford said. "We have no filings or other indications that that is happening in Missouri."
Representatives from Anthem Blue Cross and Blue Shield, Blue Cross Blue Shield of Kansas City and UnitedHealthcare, the state's most popular insurance companies, said they plan to continue offering child plans.
Private employers who offer insurance are more likely to have trouble providing coverage for pre-existing conditions, said Trey Davis, vice president of governmental affairs for Missouri Chamber of Commerce.
"In general, there are a number of employers that are weighing the cost of providing coverage versus the cost of the penalties," Davis said. "Because of the federal regulations, it's becoming a difficult choice."
Providing free preventive care
The days of co-pays for preventive care are in the past for the insured, who will no longer have to pay fees when they receive recommended preventive services such as annual checkups, screenings and vaccinations.
"Preventive care is covered 100 percent with no deductibles, no co-pays or other out-of-pocket costs, and that will include things like vaccinations and flu shots for kids as well as their annual pediatrician check-up," Ford said.
After Sept. 23, the law will expand its reach beyond children to everyone with a health insurance policy.
"It affects everybody — very heavily women and children, but it'll affect men too," Ford said. "Vaccinations, flu shots — everybody gets those, people of all ages — and cancer screenings, which affects people as they get older."
The U.S. Preventive Services Task Force, made up of medical experts and care providers, determines recommendations. According to the federal Affordable Care Act website, some services are required by all network providers while additional preventive services are determined on an individual basis.
"So if they say men at 50 should get colon cancer screenings, then the law would require that those be covered with no out-of-pocket costs," Ford said.
Butler said insurance companies now cover the bulk of the cost for preventive care.
"We've always covered (things like cancer screenings) in the last 15 or so years as a regular screening — with a co-pay of course, but that's a lot less than shelling it out of your pocket for the whole thing," Butler said.
Butler said he doesn't anticipate insurance rate increases when companies completely cover preventive care, though the extent of services that must be covered will play a part in determining the cost to insurance companies.
Staying on a parent's plan
Insurance companies will no longer be allowed to drop children from a parent's insurance plan until age 26. The change applies to all plans that offer coverage for dependents, according to the U.S. Department of Health and Human Services website.
Adult children may stay on the plan even if they're married, not enrolled in school, not living with their parents or no longer a dependent, according to the website. They must be allowed to stay on the parent plan unless an employer offers coverage.
"A lot of companies already let a recent graduate stay on a parent's health plan to avoid dropping coverage," Butler said. "That's a smooth transition."
United, Blue Cross Blue Shield of Kansas City, Humana and Aetna have already implemented coverage for 25-year-olds, according to the health department's website. Representatives from Anthem Blue Cross, Blue Shield said their insurance companies have already made the change as well.
"Going to 26 for kids — companies are working through that and that shouldn't be an issue once it's all said and done," Butler said.