State orders Regence to ‘stop denying insurance’ to kids
By VANESSA HO
This story has been updated with a response from Regence.
In an angry, sharply-worded announcement Friday, State Insurance Commissioner Mike Kreidler said he is ordering 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 follows a decision by Regence to stop selling child-only policies as of Oct. 1. Regence, the state’s largest insurer in the individual market, made the decision in the wake of a recently enacted federal health reform mandate that bars insurers from denying coverage to children with pre-existing conditions.
The company’s decision came after Kreidler made a regulatory concession to Regence, by creating a special enrollment period that limited when parents can enroll their children. That period is from Nov. 1 to Dec. 15.
Regence still offers coverage to children, but only on a family plan. But by not selling an individual policy to someone under 19, Regence is engaging in age discrimination, said Kreidler’s spokeswoman Stephanie Marquis.
“If you’re selling insurance, you can’t discriminate against someone because of their age,” Marquis said.
Kreidler said hundreds of concerned consumers had contacted his office about Regence’s decision and with what he called Regence’s “blaming” of health reform for its recent rate hikes.
“I’m sick and tired of the insurance industry pulling these stunts and misleading the public about health reform,” Kreidler said. “I expect better of companies wanting to do business in Washington.”
He said the 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 finds itself in violation of the law,” he said.
Regence responded late in the day with a statement calling Kreidler’s action “a gross politicization of such a complex regulatory problem.”
The insurer said its decision to drop child-only policies was a way to serve all members, including children, without “exacerbating costs and increasing coverage risks for the entire pool.”
Regence said Kreider’s order came as a shock, and that previous talks with his office never hinted that dropping child-only policies might be a violation of state law.
“We’re disappointed that the Commissioner appears to have suddenly changed his perspective,” said the statement, emailed by Regence spokeswoman Rachelle Cunningham.
Regence also hinted at its ability to pull out of the individual market, which would be a blow to thousands of people. The insurer covers 132,000 individual policyholders, the highest of any insurer in the state.
“We disagree with the Commissioner’s action today and will consider how it might impact our ability to offer coverage to all individuals across the state,” the statement said.
“While more than ten carriers have deserted Washington’s individual market — leaving three today — Regence has continued to insure these members despite losses of more than $33 million in the last three years.”
“While we remain committed to our individual members, we simply cannot expose our broader membership to greater risk.”
Regence currently has approximately 2,500 child-only policies that will remain in effect. Kreidler’s cease-and-desist order is effective today. His office posted a list of available individual plans here.
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