New health insurance law expected to help up to 1.5 million California children

On January 1, a new California law goes into effect that aims to expand health insurance coverage to 1.5 million of the state’s children. Earlier this year, California enacted AB 2244 to limit insurance rates for children with so-called pre-existing conditions to no more than two times the rate of what health insurance companies consider healthy children. The law will apply only to those insurance policies purchased between January 1 and March 1 of 2011. After that, the law will apply during a child’s birth month. The move was made as part of many of the provisions of federal health care reform.

Until now, many parents found that health insurance coverage for their children was out of reach because insurance companies denied coverage due to a pre-existing condition or they (parents) could not afford the insurance premiums. A pre-existing condition could be as innocuous as an ear infection to something as serious as asthma.

With the change in the law looming, a group of large California health insurance companies announced that they will resume offering child-only health insurance coverage.  After halting children-only policies in September 2010, Aetna, Anthem Blue Cross, Cigna, Health Net and UnitedHealth all plan on offering health insurance coverage for children beginning Jan 1 fearing that they will lose customers to the state’s insurance exchange once it is up-and-running in 2014. This move is expected to cover another 80,000 children who are not insured by family policies or by their parent’s employer-based insurance coverage.

This is not only just good news for California’s children, but also for the state’s projected $28 billion budget deficit. With families once again eligible for private health insurance, California has an opportunity to save millions of dollars it has earmarked to fund state health insurance for our kids. As with all budgets, personal or otherwise, every little bit helps.