Early this past fall, California's health insurers said that, in response to new requirements in the federal health care legislation backed by President Obama, they would stop selling health insurance policies to cover kids.
Last week, the insurers had reversed course, and said they would again sell such policies beginning Jan. 1, 2011.
What changed? California law.
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The insurers had objected to the federal legislation's requirement that, if they sold to children, they would have to accept all customers, including children with pre-existing conditions. But if that was a stick, the law also had a substantial carrot: a new federal mandate that individuals be covered -- which is expected to expand the lucrative individual market for policies.
Insurers didn't want to get shut out. So the legislature, in a new law, used its leverage under the same legislation to bar insurers that didn't provide policies to children from participating in the lucrative individual market. The result was the insurers' capitulating -- in their own interests (and in the interests of kids).
Hardball works. For more details, check out this smart story in the LA Times.