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Buying health insurance for children

With changes in the law — for instance, it's now illegal to deny health coverage to kids with preexisting medical conditions — parents have new options when considering coverage.

January 31, 2011|By Lisa Zamosky, Special to the Los Angeles Times
  • New federal and state provisions govern the individual insurance market.
New federal and state provisions govern the individual insurance market. (Joe Raedle, Getty Images )

If in the past you tried to buy health insurance for a child with a preexisting health condition and were turned down, it's time to give it another shot.

A provision of the federal health reform law and a new California law punish insurers that refuse to sell policies to children. As a result, those younger than 19 will have access to insurance and cannot be denied coverage, regardless of health condition.

Jan. 1 marked the start of California's initial open enrollment period, which runs through March 1. During this time, parents can purchase health benefits for their children on the individual insurance market without fear of being denied or of significant increases to monthly premiums for kids with preexisting conditions. The law applies only to individual health plans sold after Jan. 1 that do not meet "grandfathered status" (meaning plans that were already in place when the health reform law was enacted in March 2010).

About 576,000 kids in California with medical conditions that often lead to a denial of coverage might be affected, says Kelly Hardy, director of health policy at Children Now, an Oakland-based children's rights group.

If you live in California and are in the market for a child-only health insurance plan, here's what you need to know about signing up.

First: There's a 60-day initial open enrollment period to purchase child-only health plans in California and it's happening right now. But even after March 1, when that period ends, you can still enroll a child or make a change to a child's health plan during his or her birthday month or after a "qualifying event" — meaning a period during which your child loses existing health coverage due to events such as a parent changing jobs, divorce, death or other major life change.

The charge for kids with preexisting medical conditions, signed up during open enrollment or one of these other qualifying periods, cannot be more than twice the standard rate for the same type of coverage. That means that the charge for a child with asthma or diabetes will be no more than double the rate of that for a healthier child.

Anthony Wright, executive director of Health Access California, the statewide healthcare consumer advocacy coalition, notes that this is a temporary bridge until 2014, when both adults and kids with preexisting conditions can neither be denied insurance nor charged more for it.

According to the California Department of Managed Health Care, the state's HMO watchdog agency, insurers can also impose a 20% surcharge for any child who has not had continuous health insurance coverage for 90 days prior to applying for a new plan. But the surcharge can be applied only for a period of 12 months, after which insurers are required to automatically discontinue it.

Parents can buy insurance for their children even outside of these open enrollment periods with a guarantee of coverage. What's not guaranteed, however, is the price. No limitations are placed on what insurance carriers can charge at other times.

"If you have a preexisting condition, you could potentially be charged a lot more, like 10 times more. We don't yet know how the market will shake out," Wright says.

The idea behind the open enrollment periods is to prevent parents from "only signing kids up when they get really sick," Hardy says. "It's a protection for the health plans."

Making sure kids have health insurance before they are sick or injured is in the best interest of families as well, Wright adds. "Just a sprained ankle or fall off the jungle gym — the bills can pile up really quickly for minor conditions," he says.

Denying kids coverage may be a thing of the past, but medical underwriting is not, for now. When you fill out an application for coverage, carriers will review your child's health history to determine how much it will cost to insure him or her. So you should expect some questions when you apply.

How will you know whether the price you're offered for your sick child is no more than twice what a kid with no medical conditions would pay? Consumers are given an initial estimate that's based on the standard rate, says Amir Mostafaie, consumer health insurance expert at eHealthInsurance.com, an online source of coverage. "Find out the initial rate, then your worst-case scenario would be twice that."

Experts say you should look beyond the monthly premium and pay attention to annual deductibles, co-pays, coinsurance and the cost of prescription drugs to get a true sense of how much a plan will cost.

And don't be penny-wise, pound foolish. "There is a tendency to go for the cheaper plan, but is the reduction in price worth the reduction in benefits? There's a balancing act," Wright says.

It's also important to confirm that your child's pediatrician is in the network of the insurance plan you're purchasing and is still accepting patients with your type of coverage. "Shop for your physician while you're shopping for insurance," Mostafaie advises.

If you have more than one child to insure, consider the needs of each and whether it makes the most financial sense to buy one plan that covers all kids in the family, or individual plans for each. A child with asthma, for example, might cost more to insure than a second child with no medical conditions, raising costs for both. "If you buy two separate plans, you'll save money," Mostafaie says.

If until now you've chosen to not buy insurance for a healthy child because well-visits were the only reason you took your son or daughter to the doctor, consider some important changes brought about by health reform.

Because preventive services are now covered with no co-pays, coinsurance or requirements to meet a deductible, the same money you've been paying out of pocket for well-visits for a healthy child may now stretch far enough to cover a kid entirely, for not only checkups but a little extra protection in case Junior takes a nasty spill on the basketball court.

health@latimes.com

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