Understand your Child Only options for Arizona health insurance
One of the biggest changes in Arizona health coverage under the provisions of the Health Reform Act is that "child only" coverage is no longer being offered and won't be in the foreseeable future. This probably accounts for 10-20% of the policies written for pre-65 Arizona health insurance so it's a pretty big deal and the fact that it pertains to children makes it even more pressing as an issue.
The reason? Under health reform, Arizona health insurance companies had to provide guarantee issue to children-no matter what their preconditions. However, there was no mandate for mandatory insurance coverage. From a financial standpoint, the carriers saw covering all children, including those with expensive preconditions, as a ruinous financial risk if the pool of people to be covered was not expanded, so that healthy children would help defray the cost of those with precondition.
In response, the major carriers dropped all coverage for children under 19.
What is a parent who wants coverage for his or her children going to do? There are a couple of options.
He can add the child to an existing family policy, or apply for a new family policy that will include the under-19-year-old child.
He can apply to Arizona's high risk pool. However, there are a couple of requirements he needs to meet first The child must formally be declined by an insurance carrier-easy enough, if the child applies alone and is under 19. But the child also must not have had insurance for the prior six months. This is often a deal-breaker for someone who is coming off a group coverage, for example, and looking for coverage for his or her children under the risk. No parent wants his child to go without insurance for half a year.
Another option is to apply for temporary coverage. At least one carrier is still writing this type of plan that includes children only. Temporary insurance is relatively cheap and usually is approved quickly. The downside is that temporary coverage is exactly what it says: after a maximum of six months, it's over. You can buy an additional six months worth of coverage, as long as there has been no change in your child's health condition, but you can't simply renew it. It is exactly what it says: a temporary solution.
Some carriers are talking about offering child-only policies during an open-enrollment period. In other words, you would have a limited window each year to apply. This would keep a consumer from waiting until their child was sick before applying, and satisfy both the needs of consumer to get coverage the carriers' need to limit their liability. .
Hopefully this will be solved in the future, but without a mandatory requirement to have health insurance, the insurance companies have no incentive in covering all children, despite the guaranteed issue requirement. Keep in mind that all of this is in a state of flux so the rules may be different as early this afternoon. It's best to contact us as licensed Arizona health insurance agents to go over your particular situation.
