- 1,896
This was sent out in an email:
Blue Cross and Blue Shield of Illinois (BCBSIL) is committed to offering the broadest possible range of products for our members, as well as to maintaining its strong financial position. Thus, on Friday, July 16, 2010, it filed a new policy called Blue Pathway to provide coverage for children age 1 through 18 when the child is the primary insured (commonly called “child-only” policy) with the Illinois Department of Insurance (DOI).
This new coverage option responds to an Interim Final Rule that was issued by the Department of Health and Human Services (HHS) to implement several provisions of the Patient Protection and Affordability Act of 2010 (PPACA). In this Rule, HHS has determined that provisions limiting the application of pre-existing condition exclusions for children under 19 means that all children under 19 who apply for insurance for which they are eligible on or after Sept. 23, 2010, cannot be denied coverage—this is commonly known as “guaranteed issue.”
BCBSIL has long supported guaranteed issue as a way to ensure access to affordable, quality health care for all Americans, particularly children and young adults. However, that must be accompanied by an effective mandate for individuals to obtain coverage. PPACA itself recognizes the importance of pairing guaranteed issue with an effective mandate to ensure a sustainable insurance marketplace, with both being required in 2014. However, this Interim Final Rule addresses only guaranteed issue for children under 19, not any current requirements for them to have health insurance.
Without the mandate, it becomes too easy for people to buy insurance only when they feel they need services. This could be compared to allowing drivers to buy auto insurance once they have a fender-bender, and then drop coverage after their car repairs (financed by the insurance company and other insureds) are complete. This leads to what insurers term as “adverse selection,” which ultimately leads to unaffordable coverage for everyone. The Wall Street Journal recently published an article that demonstrates how this happened in Massachusetts, whose mandate has not proven as effective as originally hoped. This is based on a study commissioned by the Massachusetts Division of Insurance by the consulting firm Oliver Wyman.
We understand that several other carriers have chosen to exit the child-only health insurance market. As a mutual company that is owned by our policyholders and not publicly traded, BCBSIL wants to maintain its presence in all segments of the individual insurance market—for adults, families, and those cases where the primary policyholder is under 19. While we must wait for DOI approval before we can move forward, we are hopeful we can continue to serve this market. As always, as the market leader, we will assess and adjust our approach so we can provide our policyholders with the financial strength on which they rely.
During the interim period while we are waiting for authorization to sell this new product, BCBSIL will temporarily suspend issuing new policies to children under 19 when the child is the primary insured. BCBSIL will stop quoting its current child-only policies on July 30, and the last assigned effective dates for those policies will be Sept. 15, 2010. Any application that has not been approved by Sept. 1, 2010, will be withdrawn from consideration. Once the DOI approves this new policy, BCBSIL will provide information on how to apply for the coverage. BCBSIL is committed to reducing administrative costs for this product. For this reason, Blue Pathway will be available only on a direct-sale basis.
BCBSIL will continue to honor all existing individual policies issued for those under age 19. In addition, those under 19 can request coverage through our individual and group policies that include dependent coverage. Members with concerns may visit our website at bcbsil.com or call our customer service number at 800-538-8833.
Blue Pathway will allow members to enjoy the many benefits of our health insurance products, such as a broad network of participating providers and outstanding customer service. The product benefits are designed to be as affordable as possible given the new PPACA regulations. This new policy, if approved by the DOI, will join our other product offerings for individuals buying their own insurance, including a full range of individual and family products and a popular temporary coverage plan.
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My guess is that we'll be looking at more and more of this situation moving forward, all with the excuse of "lowering admin costs."
Blue Cross and Blue Shield of Illinois (BCBSIL) is committed to offering the broadest possible range of products for our members, as well as to maintaining its strong financial position. Thus, on Friday, July 16, 2010, it filed a new policy called Blue Pathway to provide coverage for children age 1 through 18 when the child is the primary insured (commonly called “child-only” policy) with the Illinois Department of Insurance (DOI).
This new coverage option responds to an Interim Final Rule that was issued by the Department of Health and Human Services (HHS) to implement several provisions of the Patient Protection and Affordability Act of 2010 (PPACA). In this Rule, HHS has determined that provisions limiting the application of pre-existing condition exclusions for children under 19 means that all children under 19 who apply for insurance for which they are eligible on or after Sept. 23, 2010, cannot be denied coverage—this is commonly known as “guaranteed issue.”
BCBSIL has long supported guaranteed issue as a way to ensure access to affordable, quality health care for all Americans, particularly children and young adults. However, that must be accompanied by an effective mandate for individuals to obtain coverage. PPACA itself recognizes the importance of pairing guaranteed issue with an effective mandate to ensure a sustainable insurance marketplace, with both being required in 2014. However, this Interim Final Rule addresses only guaranteed issue for children under 19, not any current requirements for them to have health insurance.
Without the mandate, it becomes too easy for people to buy insurance only when they feel they need services. This could be compared to allowing drivers to buy auto insurance once they have a fender-bender, and then drop coverage after their car repairs (financed by the insurance company and other insureds) are complete. This leads to what insurers term as “adverse selection,” which ultimately leads to unaffordable coverage for everyone. The Wall Street Journal recently published an article that demonstrates how this happened in Massachusetts, whose mandate has not proven as effective as originally hoped. This is based on a study commissioned by the Massachusetts Division of Insurance by the consulting firm Oliver Wyman.
We understand that several other carriers have chosen to exit the child-only health insurance market. As a mutual company that is owned by our policyholders and not publicly traded, BCBSIL wants to maintain its presence in all segments of the individual insurance market—for adults, families, and those cases where the primary policyholder is under 19. While we must wait for DOI approval before we can move forward, we are hopeful we can continue to serve this market. As always, as the market leader, we will assess and adjust our approach so we can provide our policyholders with the financial strength on which they rely.
During the interim period while we are waiting for authorization to sell this new product, BCBSIL will temporarily suspend issuing new policies to children under 19 when the child is the primary insured. BCBSIL will stop quoting its current child-only policies on July 30, and the last assigned effective dates for those policies will be Sept. 15, 2010. Any application that has not been approved by Sept. 1, 2010, will be withdrawn from consideration. Once the DOI approves this new policy, BCBSIL will provide information on how to apply for the coverage. BCBSIL is committed to reducing administrative costs for this product. For this reason, Blue Pathway will be available only on a direct-sale basis.
BCBSIL will continue to honor all existing individual policies issued for those under age 19. In addition, those under 19 can request coverage through our individual and group policies that include dependent coverage. Members with concerns may visit our website at bcbsil.com or call our customer service number at 800-538-8833.
Blue Pathway will allow members to enjoy the many benefits of our health insurance products, such as a broad network of participating providers and outstanding customer service. The product benefits are designed to be as affordable as possible given the new PPACA regulations. This new policy, if approved by the DOI, will join our other product offerings for individuals buying their own insurance, including a full range of individual and family products and a popular temporary coverage plan.
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My guess is that we'll be looking at more and more of this situation moving forward, all with the excuse of "lowering admin costs."
