Child-only coverage and the Affordable Care Act: lessons for policymakers

The Affordable Care Act prohibited insurers from denying or limiting cover­age for children under the age of 19 in 2010. In response, some insurers ceased to offer coverage to children in need of individual health insurance, known as a "child-only" pol­icy. This issue brief examines new state legislative and regulatory action to promote the availability of child-only policies in response to this market disruption. The analysis finds that 22 states and the District of Columbia passed new legislation or issued a new regula­tion or subregulatory guidance. As a result, child-only coverage is available in nearly all of these states. These findings suggest that states have flexibility to take innovative actions to maintain or improve their markets and insurers are highly sensitive to the risk of adverse selection. The findings also suggest the need for meaningful regulatory incentives to avoid market disruption in successfully implementing broader reforms in 2014.