Sen. Mike Enzi pressed Kathleen Sebelius on the issue at a Thursday morning hearing. Child-only health plans endangered

Health insurers in 34 states have stopped selling child-only insurance policies as a result of the health reform law, and the market continues to destablize.

According to a survey of state insurance departments by Republican Senate committee staff and obtained by POLITICO, states that have seen carriers exit the market include those that have been ardent supporters of the health reform law, like California and Oregon. Twenty states now have no insurers offering child-only policies.


Since September, the health reform law has barred insurers from withholding policies to children under 19 who have a pre-existing condition. Rather than take on the burdensome cost of writing policies for potentially-pricey medical conditions, many carriers decided to leave the market altogether.

The Department of Health and Human Services responded by changing the rule to allow states to institute an open enrollment period for child-only health insurance plans. The move was meant to stop subscribers from jumping on plans only when they were diagnosed with a medical condition.

But the regulation seems to have done little to stop carriers from leaving the market.

“We only know of one company [a local affiliate of Blue Cross Blue Shield] offering child-only health insurance,” Dan Honey, Deputy Commissioner for Life and Health in the Arkansas Department of Insurance, said Thursday. “The actual law federal law requires no underwriting for pre-existing conditions, which means guaranteed issue. Of course once HHS came out with that directive, that’s when a lot of companies started balking.”

One of the largest insurance markets in the country, Texas, has seen all their carriers drop child-only health insurance, as have other large states including Florida and Illinois.

Other states that no longer have carriers selling child-only plans include Alaska, Arizona, Connecticut, Delaware, Georgia, Minnesota, Nebraska, Nevada, New Mexico, North Dakota, Oklahoma, Rhode Island, South Carolina, Tennessee, Utah, West Virginia and Wyoming, according to the investigation by GOP staff on the Senate Health, Labor and Pensions Committee.

Sen. Mike Enzi (R-Wyo.) pressed Health and Human Services Secretary Kathleen Sebelius on the issue at a Thursday morning hearing.

“It’s absolutely devastating,” Enzi said. “The outcome is predictable as a result of the drafting that would allow people to buy a policy on the way to the emergency room.”

When asked for what “specific steps” she would take to remedy the situation, Sebelius pushed back against the notion that the new regulation would lead to widespread disruption.

“While there was an initial flurry of announcements, [insurance companies] in many states are reconsidering,” Sebelius said. “I would suggest it was a pretty cynical notion that you would only insure… children without a health condition.”

To Sebelius’ point, multiple states tell POLITICO that the damage could have actually been a lot worse, had they not taken aggressive action to intervene. At least eight states have taken regulatory or legislative action to encourage health insurance carriers to continue to offer health insurance. California, Washington, Ohio, Indiana, New Hampshire, Kentucky, Maryland and Colorado have all taken some form of action to encourage carriers to continue to offer child-only health insurance.

Washington state aggressively pushed back at insurers’ plans to drop child-only health insurance, issuing a “cease and desist” order for insurers aiming to end their child-only health insurance policies. The state also issued an emergency rule, establishing an open enrollment period for child-only health plans, in order to “help prevent disruption in the individual health insurance marketplace by promoting a uniform approach to new, regulatory requirements,” according to a copy of the regulation.

The move has stopped any Evergreen State carriers from leaving the child-only market.

Oregon, which has seven major insurers, has only seen two pull out of the child-only business: HealthNet of Oregon and Blue Cross Blue Shield Regence. With the new federal regulations looming the state instituted two open enrollment months, in February and August, when subscribers could enroll.

“We have options here,” said Oregon Insurance Division spokeswoman Cheryl Martinis. “We have still been trying to get the word out and tell folks it’s important not wait. We don’t want to lose sight of the fact that people should be carrying insurance.”

Oregon may pursue more aggressive action in the coming legislative session, pursuing policy that would further encourage insurers to participate in the child only market.