Health insurance still complicated for children with pre-existing conditions

Daniel Workman

The federal health care reform law requires health insurers to offer coverage to all kids under age 19, regardless of pre-existing conditions. But that doesn’t mean getting coverage for your child is simple.

As of Sept. 23, 2010, children can’t be denied health insurance under group plans and most individual family or child-only policies. This applies even if your child has a potentially life-threatening medical condition like asthma or diabetes. If you enjoy dependent health coverage through your employer, the simplest way to insure a youngster with medical challenges is to find out how your child can join your group plan.

But parents without group coverage often are forced to cover their children under individual health insurance policies. Depending on the state where you live, this can be tricky — and subject to specific enrollment periods.

Open enrollment periods

Even though children are “guaranteed” coverage, you must apply for child coverage during an open enrollment period. Federal law does not control when these periods take place; individual state laws determine when open enrolment periods are held and for how long.

California, Colorado, Ohio, Oregon, South Dakota and Washington have uniform open enrollment periods that must be followed by all insurers selling individual health insurance within those states, according to the U.S. Department of Health and Human Services. For example, Ohio’s first open enrolment period under the new law ran from Sept. 23 to Nov. 15, 2010. After that, health insurers in the individual market must hold open enrollment in Ohio during July and January, according to the Ohio Department of Insurance.

Featuring discounted premium rates, California’s transitional open enrolment ended March 1, 2011, according to the California Department of Insurance. If you missed that deadline, the next open enrollment period depends on the month when your child was born. A child born Aug. 17 can get health insurance coverage during the month of August, for example.

Other states let health insurers independently schedule their own open enrollment periods. If you live in one of those states, check with each prospective insurer and ask when you’ll be able to enroll your child.

Beyond open enrollment rules, some states allow you to buy health insurance at any time for a newborn or when you first adopt a child, according to the Department of Health and Human Services.

Costs and restrictions

Not all insurers sell family or child-only health insurance. Only Maine and New York require health insurers to offer child-only policies, as do Ohio and Virginia during open enrolment periods, according to a September 2010 British Medical Journal article.

No matter how severe your child’s medical condition is, carefully shop for the lowest premiums available instead of choosing the first insurance company that offers coverage. Depending on state law, insurers can restrict child coverage in the following ways, according to the Department of Health and Human Services:

• Charge higher rates based on your child’s health status.
• Allow child-only rates to differ from family coverage premiums.
• Impose a surcharge for dropping and then reapplying for child health insurance.

If you let your child’s coverage end and then reapply, expect a rate hike of up to 20 percent in California, according to the state’s Department of Insurance.

Losing existing coverage

All individual health insurance policies are guaranteed as renewable. Besides, health insurers can’t legally cancel insurance for kids with pre-existing conditions while continuing coverage for healthy children.

However, your insurer might just decide to get out of the child-only health insurance business altogether because it fears a potential spate of costly claims from seriously ill kids. Depending on where you live, it’s possible that your present carrier could cancel all child-only contracts, forcing you to find replacement coverage. Regence Blue Shield, for example, decided to no longer sell child-only policies in Washington state effective Oct. 1, 2010.

The new regulations do safeguard subsidized coverage for kids with pre-existing conditions under Medicaid or Children’s Health Insurance Programs (CHIP). These assistance programs will continue.