Blue Cross and Blue Shield of Texas Announces New Child-Only Coverage Policy
Blue Cross and Blue Shield of Texas (BCBSTX) 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 Texas insurance coverage for children age 1 through 18 when the child is the primary insured (commonly called “child-only” policy) with the Texas 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.”
BCBSTX 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 Texas individual 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 Texas 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, BCBSTX wants to maintain its presence in all segments of the Texas 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, BCBSTX will temporarily suspend issuing new Texas insurance policies to children under 19 when the child is the primary insured. BCBSTX 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 Texas Individual Health Insurance application that has not been approved by Sept. 1, 2010, will be withdrawn from consideration. Once the DOI approves this new policy, BCBSTX will provide information on how to apply for the coverage. BCBSTX is committed to reducing administrative costs for this product. For this reason, Blue Pathway will be available only on a direct-sale basis.
BCBSTX will continue to honor all existing Texas 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.
Blue Pathway will allow members to enjoy the many benefits of our Texas 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.
Looking for the best information and the best rates on Texas Health Insurance–visit www.texashealthandlife.com or give us a call at or 512-246-9955
Tags: BCBSTX, Blue Cross and Blue Shield of Texas, Texas Health Insurance, Texas Individual Health Insurance, Texas individual policies, Texas insurance coverage for children, Texas insurance policies
