Health insurance firms have been given the go ahead by the Obama administration to charge higher premiums for children with serious medical problems state law permitting, in an effort to encourage insurance firms to offer child-only policies.

Major insurers, who had stopped issuing new child only policies due to unprofitable business, earlier this year, said the administration’s interpretation of the new health care law meant families would be able to buy last minute coverage, when sick children needed to be hospitalised.

The administration had in September permitted insurers to establish open enrollment periods e. g. for one month in a year, when they would accept all children.

Answering a question raised by many insurers Wednesday, the administration gave them permission to charge higher premiums for sick children outside the open enrollment period, if such underwriting was permitted under state laws.

Jay Angoff, Director of the Office of Consumer Information and Insurance Oversight at the Department of Health and Human Services said insurers could until 2014 adjust their rates based on health status, as far as state law allowed.

The difficulty in preserving access to child only insurance policies is one of the latest example of the unintended consequences of the Patient Protection and Affordable Care Act, which issue will be resolved in 2014. If, the Republicans do not succeed in dismantling the new law, health insurance coverage for all Americans will be mandatory beginning 2014, when insurers will be required to accept all applicants, even those with pre-existing conditions.

For months, the White House has been trying to get insurers to provide coverage for children with cancer, autism, heart defects and other conditions.

Child only policies are for those parents who are unable to afford family coverage, or if they work for employers that do not offer coverage of dependents. Child only policies make up around 8% to 10% of the individual insurance market.