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The various parts of Health Reform are scheduled to roll out at different times with some early parts already in place now before the big Jan 2014 roll out. One of the more significant pieces dealt with guaranteed issue health insurance for children up to age 18.
This has largely been
incorporated by the carriers
into the market with
slightly different
approaches but let's take a
look at what to expect with
children that have health
issues.
Effective September 23rd, 2010, California health insurance for children age 0-18 is guaranteed issue. This means that a child cannot be declined coverage on the standard marketed individual and family health insurance plans due to pre-existing conditions or health. This is a pre-curser to what the rest of the market can expect Jan 1st, 2014 although the exchanges and resulting subsidies are not in place for this initial roll out of child only guaranteed issue coverage.
This is the good news and
for parents of children with
serious health issues, a
welcomed relief. It's
important to understand that
although coverage cannot be
declined to pre-existing
conditions, the rates
offered can be impacted
significantly. Let's take a
look at how the carriers
have addressed this rating
factor.
We remember the 30 days
prior to the Sept 23rd, 2010
roll out with mass updates
from the carriers in a
frenzied mode. It was
clearly a work in progress
to figure out the roll out
of guaranteed issue as all
parties attempted to
understand the limits and
requirements of the laws.
Before we get into the
rating factors, let's look
at "tiers" when discussing
individual family health
plan rates in California.
When you apply for health insurance in California, you generally go in with the quoted rates you find on our website. These are called "Tier 1" rates and are the best rates available on the market. These rates are based on good health and the actual offered rates can change after the underwriting process depending on your health.
They generally go up along these lines: Tier 1 - best rates. Tier 2 is 25% higher than Tier 1. Tier 3 is generally 50% higher than Tier 1. Tier 4 might be 100% or more than Tier 1 depending on carrier. There can even be a Tier 5 which might be 200-300% higher than the Tier 1 best rate. These rating tiers have always been available even prior to the Sept 23rd roll out. There also a new 20% increase rating based on tobacco usage which can be accessed in addition to the other tier increases. Now, let's discuss guaranteed issue coverage tiers for children which partially depends on when they apply.
If your child is applying during an open enrollment window such as during birth month or upon losing parent's group health coverage, the amount applied may be capped at 100% of tier 1 rates. If applying outside of open enrollment window, the tiers can be very very high with rates between 200-400% depending on carrier and of course, health status/history.
A 20% surcharge can be applied additionally for 12 months if the child did not have eligible prior coverage.
Ultimately, a child may just qualify based on the original tiers (1-5) above so although the guaranteed issue rates can be high (especially outside of open enrollment), it's good to have a fall-back option for children with more serious issues. Of course, the impact of this new option is that the rates for all children age 0-18 will go up and have over the past 12 months.
We would expect the same thing to happen Jan 2014 when guaranteed issue is rolled out to all individuals as the rates start to catch up with group health insurance rates which have been guaranteed issue for over a decade now. We would be happy to walk through your options when shopping for children's health insurance in California to make sure this is the best approach.
Call us at 800-320-6269 with any questions. Our services are free to you as licensed health agents.