INSURERS AND SICK KIDS…. The new Affordable Care Act includes provisions that prohibits private insurers from denying coverage to children with pre-existing conditions. As of a few days ago, insurance companies thought they’d found a loophole.

The new law, insurers said, would require coverage of pre-existing conditions for children covered by their family policy. But, the industry said, to get around the requirement, insurers could just stop writing insurance for sick kids altogether. That’s not how policymakers interpret the new law, but industry lawyers were apparently fond of this reading.

Yesterday, Democratic officials were livid. Health and Human Services Secretary Kathleen Sebelius wrote to insurance lobbyist and AHIP president Karen Ignagni, insisting, “Now is not the time to search for non-existent loopholes that preserve a broken system.” Sebelius added, “I urge you to share this information with your members and to help ensure they cease any attempt to deny coverage to some of the youngest and most vulnerable Americans.”

At the same time, House Speaker Nancy Pelosi also pressed the industry: “The intent of Congress to end discrimination against children was crystal clear, and as the House chairs said last week, the fact that insurance companies would even try to deny children coverage exemplifies why the health reform legislation was so vital.”

Perhaps realizing that this would be an unhelpful fight — do insurers really want to fight to deny coverage to sick children? — the industry backed down overnight.

In a letter to Health and Human Services Secretary Kathleen Sebelius, the industry’s top lobbyist said insurers will accept new regulations to dispel uncertainty over a much-publicized guarantee that children with medical problems can get coverage starting this year.

Quick resolution of the doubts was a win for Obama — and a sign that the industry has no stomach for another war of words with a president who deftly used double-digit rate hikes by the companies to revive his sweeping health care legislation from near collapse in Congress.

“Health plans recognize the significant hardship that a family faces when they are unable to obtain coverage for a child with a pre-existing condition,” Karen Ignagni, president of America’s Health Insurance Plans, said in a letter to Sebelius. Ignagni said that the industry will “fully comply” with the regulations, expected within weeks.

I don’t know if the resolution was the result of stern administration warnings or fear of a p.r. nightmare, but either way, it’s the answer families and Democrats were hoping for.

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Follow Steve on Twitter @stevebenen. Steve Benen is a producer at MSNBC's The Rachel Maddow Show. He was the principal contributor to the Washington Monthly's Political Animal blog from August 2008 until January 2012.