The reason? Insurers say they can't anticipate costs under new federal requirements that they not deny coverage to children with pre-existing conditions. As the LA Times explains:
"Insurers said they were acting because the new federal requirement could create huge and unexpected costs for covering children. They said the rule might prompt parents to buy policies only after their kids became sick, producing a glut of ill youngsters to insure. As a result, they said, many companies would flee the marketplace, leaving behind a handful to shoulder a huge financial burden.
"The insurers said they now sell relatively few child-only policies, and thus the changes will have a small effect on families.
"Unfortunately, this has created an un-level competitive environment," Anthem Blue Cross, California's largest for-profit insurer, said in a statement declaring its intention to "suspend the sale of child-only policies" on Thursday, six months after the healthcare overhaul was signed.
Insurers are trying to protect themselves and take a hard line with states such as California, which are considering how to implement the new federal health legislation. Strikingly, it is this subject that is the focus of most of the behind-the-scenes fighting in Sacramento right now, not the budget (which, despite some negotiations today, seems unlikely to be approved until after the Nov. 2 election).
But this is a dangerous game for insurers, costing them business and political currecy. In California, legislation headed to the governor's desk would bar insurers who opt out from covering children from selling policies in the lucrative individual market, the Times notes.
Also, while the child-only market is small (and the insurers' decision does not apply to existing policies or family policies), the insurers also risk pushing more children into government programs. In this way, opponents of the health legislation, who like to say they are fighting the government takeover of insurance, are moving us further in the direction of government-run health care.