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Insurance companies respond to health care reform

Health insurance

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Kai Ryssdal: This is probably the biggest week for health care since the reform law passed earlier this year. A whole slew of provisions from that law go into effect on Thursday. Two of the biggest are that insurers won't be able to deny coverage to children with pre-existing conditions, and parents are going to be able to keep their children on family policies until they turn 26.

But health care companies have some new policies of their own as Janet Babin reports from North Carolina Public Radio.


Janet Babin: Insurance companies in a handful of states, including California and Kansas, have stopped offering child-only health insurance. These policies usually cover kids under 19 who aren't part of their parents' health care plans. They're often purchased by a guardian or grandparent.

Linda Sheppard with the Kansas Insurance Department. She says four major insurance players in her state have opted out of child-only coverage, including the biggest: Blue Cross and Blue Shield.

Linda Sheppard: We certainly have no authority to tell a company that they have to offer this kind of coverage in the market.

In many states, insurance companies have also asked for rate hikes. Insurers say the policy changes and premium increases are directly tied to new health care reform changes. That's led many politicians up for re-election to call for the new law to be repealed altogether.

Robert Zirkelbach is with America's Health Insurance Plans, a health insurance industry trade group.

Robert Zirkelbach: It's a basic law of economics, that when new benefits are added to a policy, or more people are added to a policy, that incurs additional cost, that will be reflected in the cost of coverage.

But health care advocates say companies are using reform as an excuse to increase profits. Ethan Rome is executive director of Healthcare for America Now or H-CAN.

Ethan Rome: There's nothing about this law that warrants insurance companies to jack up our rates or drop kids.

That's sure to be debated tomorrow when 30 state insurance commissioners meet with President Obama to talk about health care reform.

I'm Janet Babin for Marketplace.

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