Nevada Insurers Stop Offering Child-Only Policies Due to Uncertainty Over Federal Health Care Law

CARSON CITY – A Nevada insurance broker today said families seeking health care coverage for a child only can no longer purchase such policies because of uncertainty over the effects of the national health care reform law.

Phil Randazzo, chief executive officer of Nevada Benefits Corp. said uncertainty about how the Patient Protection and Affordable Care Act will affect these types of polices has led the companies offering health care coverage in Nevada to independently decide to no longer offer such coverage.

Nevada Benefits is one of the state’s leading brokerages of individual and group medical and life insurance.

“What happened was that children now are allowed to purchase health care insurance with no preexisting conditions,” Randazzo said. “Which sounds good, but the problem is the insurance companies don’t know how to underwrite that or handle that because it is an unknown.”

Regulations have not yet been generated for insurance companies to know the ramifications of the change, he said.

Elements of the federal health care law, including provisions prohibiting insurance companies from turning down children with preexisting conditions, took effect today. Other states have seen the same effect as companies decide to no longer offer the policies.

“The insurance companies made a business decision, which I totally understand, to not offer child only insurance policies,” Randazzo said. “So now if you live in Nevada, and you want to buy insurance for your child, you can’t buy one.”

One alternative would be for parents to cover their children under a health plan offered by an employer, he said.

Randazzo said the situation “is a big mess.” Nevada’s Congressional delegation has been contacted but is unaware of how this situation will be resolved, he said.

Randazzo said he is now turning down such coverage requests because he can longer sell such policies.

Ethan Rome, executive director of the liberal group Health Care for America Now (HCAN), issued a statement criticizing the decision of the insurance companies to drop the coverage.

“The latest announcement by the insurance companies that they won’t cover kids is immoral, and to blame their appalling behavior on the new law is patently dishonest,” he said. “Instead, they should reverse their actions immediately and follow the spirit of the law, instead of exploiting loopholes.”

Nevada is one of several states challenging the constitutionality of the health care law.

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Audio clips:

Phil Randazzo said child-only insurance policies are no longer available in Nevada due to the new health care law:

092310Randazzo1 :18 been put out.”

Randazzo said insurance companies had to make a business decision:

092310Randazzo2 :13 can’t buy one.”

Randazzo describes the situation as a big mess:

092310Randazzo3 :18 vote right now.”

  • http://nevadanewsbureau michael

    ANSWER IS SIMPLE; single payer with base policy for all Americans (legal) and if you want more; that is what private for profit insurance is for.
    As things are millions are discrimiated against for the benefit of others.

  • http://www.coveragepoint.com John Rueschenberg

    Oregon May Have the Answer for Child Only Health Policies:

    The state of Oregon a few months ago restructured child only individual enrollments, by switching to open enrollment periods, similar to that of a group open enrollment period. Child only applications are only accepted during the months of February and August every year with effective dates of either March 1st or September 1st. Other states should pass similar laws to prevent insurance abuse and keep companies from making these drastic changes that regulate risk and keep companies on board. There does need to be some regulation to keeping premiums from skyrocketing due people only obtaining coverage after they have a claim, because there’s no consequences to for waiting to obtain coverage. Open enrollment periods so far look like the answer.

    To simplify the process, the annual enrollment period across the industry, including Medicare Advantage Plans, which too have enrollment periods should be adjusted. These periods should be changed to the month the oldest applicant in the family was born and that’s the month they can apply for a plan. This would simplify the process for the consumer, government, insurance company and agent.

    All will agree, remembering the month you’re born is far easier than having to look up on the internet when the next enrollment will be. This change would eliminate some of the confusion that comes with purchasing an insurance policy. Having enrollment periods all in a small period of time, like what currently happens with Medicare, group and now child only policies in OR, increases the chance of error and reduces the quality of service. This is due to heavy workloads during these periods for the government, company and agent. Switching to the month of the oldest applicant in the family’s birthday will reduce the amount of junk mail and SPAM email that consumers receive from insurance companies and agents. Instead of getting these solicitations all year long, it will primarily only happen during the weeks leading up to your birthday.

  • Sdashelina

    This totally sucks! I get coverage for myself through my employer, but to insure one child it will cost 1/3 of my pay. It’s half of my rent. I can’t afford to cover my child. I went looking for an individual policy for her….no luck.