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State orders Regence BlueShield to insure children

Commissioner slams insurer for age discrimination

By Aaron Corvin, Columbian Port & Economy Reporter
Published: October 15, 2010, 12:00am

In a sharply-worded announcement Friday, Washington Insurance Commissioner Mike Kreidler said he ordered the state’s most powerful insurer — Regence BlueShield — “to stop illegally denying insurance to children, effective immediately.”

“Regence is in clear violation of state law that prohibits insurers from denying insurance to people on the basis of age,” Kreidler said in a statement. “I was shocked and deeply disappointed when Regence announced its decision last week to stop selling insurance to kids.”

Kreidler’s announcement comes on the heels of a decision by Regence to stop selling individual health insurance policies to people under age 19 as of Oct. 1. Regence made the decision after provisions of the federal health care reform law took effect Sept. 23, requiring insurers to cover all health conditions of the children they enroll — no exclusions for such preexisting conditions as asthma are allowed.

Samantha Meese, spokeswoman for Regence, said in an e-mail that the nonprofit was “shocked by the commissioner’s action and press statement” and that “this gross politicization of such a complex regulatory problem does not help address the very real economic challenges of providing coverage to Washingtonians seeking individual insurance policies, especially children.”

Meese said Regence disagrees with Kreidler’s action and “will consider how it might impact our ability to offer coverage to all individuals across the state.” She said 10 insurers have left Washington’s individual market but that Regence “has continued to insure these members despite losses of more than $33 million in the last three years.”

Regence’s decision to stop selling child-only health poli[JUMP]cies affects people who buy individual insurance on the open market, not through jobs or government programs. The nonprofit currently has 2,500 children enrolled on individual health plans that will remain in effect. Regence will accept new children during the state’s open enrollment period — but only if their parents also remain or become Regence members.

Kreidler said hundreds of consumers have contacted his office “upset over Regence refusing to cover kids and blaming recent rate increases on health reform.” He said he’s “sick and tired of the insurance industry pulling these stunts and misleading the public about health reform.”

Meese said that while Regence remains “committed to our individual members, we cannot expose our broader membership greater risk. Therefore, we believe the changes we made are in the best interest of the nearly 1 million Washingtonians we serve today.”

The nonprofit Regence Group — which operates as Regence BlueShield in most of the state and as Regence BlueCross BlueShield of Oregon in Clark County — covers more than 720,000 lives, or roughly 18 percent of the market.

Stephanie Marquis, a spokeswoman for Kreidler, said the insurance commissioner thought he’d addressed Regence’s concerns by creating a limited Nov. 1 to Dec. 15 open-enrollment period for children, to make sure parents don’t insure kids only when they need expensive health care.

Kreidler said Regence’s decision had a serious impact on Washington families and “could’ve had a devastating impact on the insurance market. We worked hard with the large health insurers to accommodate their concerns and most, including Premera and Group Health did the right thing. Frankly, Regence deserves the backlash from its decision. It overreacted and now it finds itself in violation of the law.”

If Regence refuses to comply with the cease-and-desist order, it could request a hearing before an administrative hearings judge special to the insurance commissioner’s office or seek an outside hearing before a Superior Court judge.

Marquis said the order issued by Kreidler is unusual. “I can’t remember the last time we issued an order against one of the major health insurers,” she said.

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Columbian Port & Economy Reporter