Quick Insurance Tips

Finding good health insurance for children got more difficult after the health care reform mandates of September 23 2010.

Group and family medical insurance policies are available, but private health insurance companies selling individual policies are, almost without exception, unwilling to insure children on standalone policies. They may insurance a child on a policy with a parent, but will no longer insure a child or children who need coverage on their own.

This is an unfortunate side effect of a law that attempted to provide universal health care for all children regardless of their medical history. The mandates backfired because insurance companies never want to take on all comers.

Mandating that an insurance company insure everyone is similar to mandating that banks lend money to everyone. No bank, no matter how big would be able to survive under a mandate like that.

Insurance companies cannot provide insurance for everyone who applies unless everyone applies. One unhealthy person can cost a company hundreds of thousands of dollars. Raising the rates to attempt to spread the cost of insuring the unhealthy to other policyholders would result in rates that would drive the healthy people away.

Since the more healthy would be more likely to risk not being covered by medical insurance, the rates would continue to escalate. Eventually only those who could afford extremely high premiums would be covered.

Usually a family that wants to insure both parents and a child or both parents and children will find that the best deal for health/dental insurance for their kids is to put them on the family policy.  However, insurance companies have different rating procedures for children which can create confusing and often unreasonably high prices for kids.

In general cost for medical insurance for a new born should be less than the cost to insure an adult. Newborns tend to have more medical expenses on average than two year olds, but after we get past the first year or so of life, the cost of a medical care goes up at ever age.  What this means is that companies that charge the same for children as adults overcharge for kids.

Whether you are looking for Maine child insurance or low cost health insurance for kids in South Carolina, you want your child to be charged a child rate not an adult rate.  Some companies will charge adult rates if a child is insured by him or herself.  Other companies will charge an adult rate for the child if the child is insured with one parent as opposed to two.  This means that it is easy to pay much more than the average cost of child health insurance if you don’t shop around.

Often when we see wide variance in pricing we fear that there is also a wide variance in quality. This is no different when we are shopping for health insurance for a child.  Health insurance programs can, of course can be qualitatively different.  However, now that you understand that the pricing strategies can be very different, you know that this isn’t always the case.

Government Sponsored Child Medical Insurance Programs

There may be a state sponsored program that is better for children than a private health insurance in the state of Iowa or a private Colorado health insurance plan.  However, these plans are state specific and a discussion of the pros and cons of those programs is beyond the scope of this article.

I operate an agency Connecticut and am familiar with many of the programs offered here. In State of Connecticut, the state-sponsored health care programs have the advantage of accepting children who have medical conditions that private insurers will not accept.  However, the policies are more limited than most of the plans offered in the private market.  Since children tend to cost insurance companies so much less than adults, the prices for the government plans are often in the same ballpark, as the prices for the more robust plans offered by companies like Aetna and Blue Cross Blue Shield.