As of September 23rd of 2010 dependent children can not be declined or pre-x from a health insurance policy.
This is creating some interesting situations. Right now we have seem some carriers stop selling stand alone children’s policies which is concerning. I can only speculate why they have stopped. One reason is the carriers are getting ready to increase the cost of these plans. If every child is guaranteed issue this mean the carriers are going to be absorbing much higher claims.
An example of this is we insurance children that suffer from a certain condition that has a mandate of coverage. This mandate states the condition must be covered as any other illness and the child can not be declined from. So we have about 30 stand alone children’s policies at an avg annual premium for $2,400 x 30 policies= $72,000. For this particular condition to be treated ave about $34,000 year per patient x 30= $1,020,000 in claims. So with this situation the insurance company is paying out much more than they are taking in.
So if we expand this on a state level of Guaranteed Issue for all children we should see an increase in premium to cover the claims. This is the reason some carriers are not selling stand alone children’s policies as of right now.
What to do if you are in the market for a policy for your child.
If your child can get through underwriting take out a policy a.s.a.p. The reason for this is that policy will be a grandfathered policy which mean you could lock in a much lower rate than what the market has to offer after Sept. 23rd 2010. This could be the difference of paying $83 a month to paying $250 for the same policy after Sept. 23rd.