Coverage for children in Texas has been dramatically altered since passage of the Affordable Care Act (ACA) on March 23, 2010. Availability of coverage, benefits, and premiums have been dramatically altered by the ACA.
Until the passage of the ACA, long-term policies covering only children represented approximately 20% of health insurance policies written by Stateside Insurance Services. Once ACA regulations were adopted, long-term coverage for only children dropped to 7% of all policies written by Stateside
. The ACA established a specific Open Enrollment period, typically November 1 to December 15, which forced parents to make coverage decisions for their children and not delay enrollment.
Effects of Guaranteed Issue on Children Policies
The reason child-only coverage has such limited carrier options currently is because coverage must be offered on a guaranteed issue basis, which means that the application cannot be denied regardless of health history or current health condition. Regulations also stipulated that there was no waiting period for preexisting conditions. Carriers such as Aetna, CIGNA, Humana and UnitedHealthcare withdrew from the individual market in Texas, including child-only coverage, because they were concerned about the potential financial risk when a policy must be issued regardless of health with all benefits available immediately.
The reduction of carrier options resulted in Blue Cross Blue Shield as the primary recipient of child-only applicants, which meant the carrier issued coverage on healthy applicants as well as a large number of children with significant health issues. Since applicant demographics shifted, Blue Cross Blue Shield premiums escalated dramatically. Policyholders witnessed an almost 70% increase in individual premiums over 2 years and the resulting premiums were most visible with children-only policies. Prior to the ACA a child-only policy with a $2,500 deductible and unlimited office visit copays would cost under $100 per month. Today, ACA plans with similar benefits will have premiums in excess of $250.
Preventive Care Benefits for Children
The ACA mandated that all plans must provide Essential Health Benefits (EHB). The mandate was created to provide insureds access to comprehensive coverage with the goal to lower overall healthcare costs. The 10 services included in the EHB are:
- Outpatient Services
- Emergency Services
- Behavioral Health Services; including mental health and substance abuse treatment
- Prescription Drugs
- Rehabilitation Services
- Laboratory Services
- Preventive and Wellness Services
- Pediatric Services; including dental and vision benefits
In addition to the EHB, the ACA required that coverage be offered without annual dollar limits.
Benefits for children that existed prior to the ACA and remained unchanged under the act addressed immunizations. All major medical plans covered and continued to cover state mandated immunizations at 100% without deductible being applied. Childhood immunizations include diphtheria/tetanus/pertussis, polio, measles, mumps, rubella, hepatitis B, varicella, meningococcal and hepatitis A.
Prior to the ACA short-term coverage was used to provide limited duration coverage to address a gap in coverage resulting from a job change or loss of C.O.B.R.A. Once premiums for ACA plans began to increase short-term coverage became a viable option because the premium savings were significant which more than offset the personal responsibility fine.
However, short-term had limited availability for child-only coverage. Carriers were hesitant to issue short-term coverage because of the potential fallout generated when claims were not approved due to a child’s preexisting condition. The carriers also had the additional issue related to the size of a child’s claims in the case of serious condition. Healthcare is expensive but in the case of a child claims can be significantly higher and the policy is not generating sufficient premium revenue due to the nature of short-term health insurance.
From a consumer’s standpoint the first significant deficiency with short-term coverage is that it will not cover any preexisting condition. Because short-term coverage is not medically underwritten, the coverage does not provide benefits for any medical treatment, including prescription usage, which existed prior to the effective date of short-term coverage.
Short-term coverage will eventually end, and new coverage must be secured. Since short-term insurance is not permanent, you find yourself back in the health insurance market every several months. Also, the important aspect to understand is that any benefit received during the short-term coverage will be considered a preexisting condition on the next short-term coverage, and there will be no benefits for that condition.
The positive aspects of short-term coverage are numerous. A policy can be assigned with an effective date as early as midnight following submission of the application. Premiums for short-term coverage are very cost competitive, especially for individuals under the age of 19. The application process is very simple when the application is submitted online. Depending on the carrier, there are several deductible options ranging from $250 to $2,500.
Only National General will issue short-term health insurance. National General’s short-term insurance includes multiple plan designs and benefit options to help tailor short-term coverage to fit your needs, budget and length of coverage requirements.
Short-term coverage from National General offers:
Short-term from National General will not replace essential benefit coverage of the Affordable Care Act (ACA) and you will still be subject to the Shared Responsibility Fine; but the options provide a level of coverage between now and the next Open Enrollment period. You can apply for National General short-term coverage by submitting your application online at National General Short-Term Coverage Application.
STATESIDE CAN HELP!
Stateside Insurance Services, since 2003, has focused on providing comprehensive health insurance information, responsive customer service and expert industry knowledge for Texas consumers. Stateside has annually been recognized by health insurance carriers and the Health Insurance Marketplace as a Top Producer in Texas.
Whether the health insurance policy is for an individual, family, small business or supplemental Medicare coverage, Stateside dedicates the time, and our deep industry expertise, to ensure our clients have identified the best health insurance plan for their specific needs.
Stateside is available to answer any general questions regarding your coverage options, can provide a subsidy determination, and even assist in creating and submitting online applications for ACA compliant plans during an Open Enrollment or throughout Special Enrollment periods.
Stateside can be contacted either by phone (866) 444-3332 (toll free) or by email at email@example.com. Our Telephone Appointment System can be accessed through:
By using the Telephone Appointment System, clients can take advantage of scheduling a health insurance discussion when convenient for their schedule. During Open Enrollment phone appointment availability is expanded to include extended hours and weekends.