Some health insurance companies are no longer offering child-only insurance policies. In Texas, UnitedHealthOne has pulled out of this market.
Why…?
The new health care reform legislation requires insurance companies to cover pre-existing conditions in children under age 19 on all plans starting on or after September 23rd, 2010. This is good news to many families with children who have difficulty finding health insurance coverage. However, to the insurance companies, this means added risk and costs. When an insurance company offers coverage to a child with pre-existing conditions, most of the time they will have to pay claims which exceed the amount of the premiums they collect. From a financial standpoint, this obviously is a bad idea. In addition, many companies are worried that parents won’t have their children get health insurance until they are sick. That’s called adverse selection (only the sick buy health insurance) and has to be avoided for health insurance companies to remain in business. For these reasons, companies like UnitedHealthOne have decided to only offer child coverage when they have a parent or family on the policy as well.
This is an unintended consequence of the health care reform legislation. It may force parents to buy expensive policies to cover their children when it would have been cheaper to buy separate policies for the parents and children.
3 Comments
BlueCross BlueShield of Texas has just announced a new child only health insurance policy called Blue Pathway with an enrollment period between July 15th and September 15th. See bcbstx.com/bluepathway for more info.
As a broker, I am disappointed that they are not offering commissions to brokers for selling this product. However, I think it is important to spread the word about this plan since so many of our clients have been frustrated by the fact they have not been able to find child-only policies since the passage of health reform.
Hi Cass,
Unfortunately, all of the major health insurance companies in Texas have discontinued offering child-only coverage. Other than spending too much to add your child to your employer plan, your current options are:
- Consider a family policy for you and your child (You would lose the benefit of your employer contributing to the cost of your coverage)
- Consider a limited benefit plan for your child (I would not recommend this because there is a cap on the benefits)
- Consider a short term plan for your child (I would not recommend this because short term plans are non-renewable)
The only optimism I have for you is that hopefully this will change soon. There is talk of some companies starting to offer child-only coverage again, but I haven’t seen anything happen in Texas yet.
Unfortunate unintended consequence. I’m a single parent to one child with employer benefits that monthly premiums cost $476 for dependent coverage. I make “too much” to qualify for any type of health coverage assistance in covering the premiums (I make less than $2000 a month). What health insurance companies besides BCBS are offering child only plans?