Health insurers appear to be backing off renewed efforts to exclude children with pre-existing conditions.

When health insurance reform was signed into law just last week, Democratic lawmakers said that coverage of children with pre-existing conditions would be one of the most immediate effects. But within days, insurers argued a detailed reading of the new legislation allowed them to continue cutting-off kids with conditions like Down syndrome and cerebral palsy in certain circumstances until 2014.

The claims were met with a sharp rebuke Monday from Secretary of Health and Human Services Kathleen Sebelius. In a letter to Karen Ignagni, head of the health insurers’ trade group America’s Health Insurance Plans, Sebelius said she would be issuing regulations in the coming weeks requiring that insurers cover children and any pre-exiting conditions they may have on their parents’ insurance plans beginning in September.

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“Now is not the time to search for non-existent loopholes that preserve a broken system,” Sebelius wrote.

Less than 24-hours later, Ignagni wrote back to say that her members “await and will fully comply with” regulations spelling out coverage of children with pre-existing conditions.