Insurers cheer open enrollment period for covering sick kids

The Obama administration clarified Tuesday evening that new rules prohibiting insurers from denying coverage of sick kids will be governed by open enrollment periods in some states — a move being applauded by insurance groups wary that parents would simply wait until their kids got sick to enroll them in coverage.

The prohibition on excluding kids with pre-existing conditions — part of the Democrats' new health reform law — kicks in Sept. 23. Some insurers were threatening to drop their "child-only" policies out of fear that parents wouldn't see much reason to enroll healthy kids.

In an interim final rule published Wednesday, the Health and Human Services Department (HHS) sought to alleviate those concerns.

"To address concerns over adverse selection, issuers in the individual market may restrict enrollment of children under 19, whether in family or individual coverage, to specific open enrollment periods if allowed under state law," HHS clarified.

The move was immediately cheered by insurers.

"We think this policy will ensure that children get the comprehensive coverage they need while avoiding this unintended consequence," Scott P. Serota, president and CEO of the Blue Cross and Blue Shield Association, said in a statement. "This is consistent with other public and private health insurance programs."