Obama administration has blunt message for insurers

WASHINGTON (Reuters) - The Obama administration on Monday had a blunt message for health insurers -- the new healthcare law requires that they not drop coverage for children with certain pre-existing conditions.

President Barack Obama makes remarks on health care reform at the University of Iowa in Iowa City, March 25, 2010. REUTERS/Jason Reed

Health and Human Services Secretary Kathleen Sebelius conveyed the message in a letter to Karen Ignagni, chair of America’s Health Insurance Plans, a group that promotes the health insurance industry in Washington.

Her letter came after the New York Times reported that insurance companies are arguing that at least for now they do not have to provide one of the benefits of the new healthcare law, insurance coverage for certain sick children.

“Unfortunately, recent media accounts indicate that some insurance companies may be seeking to avoid or ignore a provision in the new law that prohibits insurance companies from excluding children with pre-existing conditions from coverage,” Sebelius wrote.

The Times reported that insurers agreed that if they provide insurance for a child, they must cover pre-existing conditions, but that the law does not require them to write insurance for the child and it does not guarantee the “availability of coverage” for all until 2014.

The measure requiring insurers to provide coverage to children with pre-existing conditions is one of the new law’s main features and President Barack Obama used it as a key selling point in his final drive to gain congressional passage of the legislation.

The Obama administration and fellow Democrats are rigorously defending the legislation in the face of skepticism from Americans about the cost of the program and whether it will end up costing them more money.

Sebelius said she plans in coming weeks to issue regulations that will erase any ambiguity about the law and make certain that by September of this year, “children with pre-existing conditions may not be denied access to their parents’ health insurance plan.”

“Now is not the time to search for non-existent loopholes that preserve a broken system,” Sebelius wrote. “Instead, we should work together to do the hard work of improving the affordability, quality and accessibility of our healthcare system.”

The U.S. Congress approved a package of final changes to the healthcare overhaul last Thursday, and Obama is to sign it on Tuesday at an event in northern Virginia. Obama has dared Republicans to go ahead and try following through on their pledges to try to repeal and replace the law.

Reporting by Steve Holland; Editing by Cynthia Osterman