Insuring a newborn? It's not always child's play

Sometimes babies with health problems denied lower-cost policies


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In May, W.M. Nzambi and his wife brought into the world a girl. A healthy one.

Good thing, too -- it had never occurred to them that their baby might not be eligible for the family's health plan. But for a few months this year, Highmark Inc. was screening newborns for pre-existing conditions to determine eligibility for direct-pay health care plans.

"Luckily, my baby girl is as healthy as could be," said Mr. Nzambi, a financial planner. "This is a pretty tremendous difference from the policy of old."

Like many of America's self-employed -- and like many who work for someone else, but whose company doesn't offer health care -- Mr. Nzambi buys his insurance directly from the insurance company, in this case Highmark, Pittsburgh's dominant health insurer.

For the first 31 days after birth, as per federal law, a newborn's care is covered under the parents' insurance as long as the baby is going to be added as a dependent to the parents' health plan. Within the first month, the parents have to add the newborn's name to the existing contract, and in the case of Highmark's direct-pay family plans, a baby is supposed to slide over unconditionally, receiving continuous coverage.

But on April 1, Highmark began screening newborns for "pre-existing" health conditions before they could be added to their parents' policy. As a result, seven families, according to Highmark, were told that their babies wouldn't be eligible for health insurance under the lower-premium direct-pay plan.

Instead, they would be offered a far more expensive "guaranteed issue" plan, which doesn't require health screenings.

"This is really an issue where Highmark has to ask itself, 'Does this decision fall in line with the kind of community character that Highmark has always had?'" Mr. Nzambi said.

It seems that Highmark has already asked itself that question. The policy was a mistake -- an "operational policy error," in the words of Highmark spokesman Leilyn Perri.

Highmark would not say where, exactly, the operational error lay. Was the implementation of the policy itself somehow an accident? Or was the policy put into place correctly, but judged to be a mistake only in retrospect, once Highmark considered its ramifications?

"I've said all I can," Mr. Perri said.

Highmark said it had contacted the families whose newborns were rejected and offered them continuous coverage. The newborn-screening policy was rescinded July 14, at least with regard to those particular direct-pay health plans.

Other newborns must still be screened, though, with Highmark as well as other insurers. It's the same thing that adults go through when they're dropped by one insurer and are trying to pick up individual coverage through another company, but people with employer-paid plans often don't realize it can happen to babies, too. Insurers want the policy to reflect the risk of payout, and one way to judge the risk is by kicking the tires before underwriting the policy.

Cecilia Kownacki found out the hard way. The denial letter from Highmark arrived last month: "Dear Ms. Kownacki: [We] are sorry to inform you that your application does not meet our underwriting criteria for approval," the letter said.

She took the news in stride, with good humor, perhaps because she was expecting the rejection, perhaps because that's her natural disposition, but more likely because she is only 7 months old.

Her parents, Frank and Susan Kownacki, were considerably more distraught. Their baby daughter was uninsured, starting Friday.

"When we got the rejection letter," said Mrs. Kownacki, of the North Side, "I was in tears."

Mrs. Kownacki's issue is different than Mr. Nzambi's. Whereas Mr. Nzambi had a family plan, the Kownackis were trying to secure an individual plan for Cecilia, moving her away from her father's Highmark plan, which was expiring.

But whether you're 70 years old or 7 months young, when you move away from one plan and try to enroll in an individual plan, you can be subject to health screenings if you want to enjoy a low-premium policy.

Cecilia failed her screening.

The condition?

Acid reflux -- in a baby, this amounts to spitting up a lot, an inability to fully digest milk.

"Of our patients, I'd say 10 percent of kids have it," said Dr. Mary Pagnotto, Cecilia's pediatrician. "It is unfortunate. She's a very healthy child, who has a very routine illness."

Routine or not, because of the illness, she could not be underwritten for Highmark's DirectBlue individual plan, which would have cost $150 or so per month. Instead, Cecilia was referred to one of Highmark's high-deductible plans, which don't require medical testing.

But that would have cost more than $400 a month.

The reason she needs an individual plan in the first place is because Mr. Kownacki is a self-employed contractor and Mrs. Kownacki's workplace, an ad firm, doesn't offer family plans.

Before last week, Cecilia had been covered under her father's university plan, for which he was eligible because he was working toward a master's degree. But his plan, and the child's, expired July 31.

Coincidentally, it was Highmark that had insured the child under her father's plan. Then, after Highmark rejected Cecilia's application for an individual plan, the Kownackis turned to the state's Children's Health Insurance Program, which just so happens to count Highmark among its local vendors. The CHIP plan, administered through Highmark and subsidized by the state, will cost about $165 monthly, but it won't kick in until Sept. 1.

For a month, Cecilia's medical costs -- if she has any --will be paid in full, out of pocket.

"It really is an anathema to us to have to get state assistance. We really feel uncomfortable about that," Mrs. Kownacki said.


Bill Toland can be reached at btoland@post-gazette.com or 412-263-2625.


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