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Learn » Health Insurance » Buying Health Insurance for Children Under 18: A Guide

Buying Health Insurance for Children Under 18: A Guide

Whether as a dependent or as a standalone, there are numerous options for kids health insurance.

October 17, 2017 - By Erica Block - read

Finding affordable health insurance for children can be a challenge. Between understanding granular rules that determine coverage eligibility and the cost of adding dependents to your plan, ensuring you have kids’ health insurance is harder than most people think.

That insurance plan eligibility can vary among different members of the same family only complicates the issue. Depending on factors such as household income, family size, and citizenship status, different members of the same family may be subject to different rules. In some cases, kids may qualify for subsidized coverage, while their parents don’t.

From employer-sponsored plans to public Medicaid programs, there are a number of ways to secure healthcare coverage for children in the US. And because everyone’s family and financial situation is different, we outline the full range of options for kids’ health insurance.

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The ACA: How Does the Law Affect Children?

Under the Affordable Care Act (ACA), insurance plans must offer the following benefits to children:

  1. Young adults under the age of 19 years must be offered pediatric dental and vision (parents don’t need to elect this coverage).
  2. Low-income young adults qualify for the Children’s Health Insurance Program (CHIP)  in most states, even if their parents don’t qualify.
  3. Young adults can remain on a parent or guardian’s policy until the age of 26 years.
  4. Large employers (defined as workplaces with 50 or more full-time employees) must offer coverage to employees’ dependents under the age of 26 (TRICARE is the only exception to this, which has unique rules).

Important ACA Rules & Guidelines

Here are the basic pieces of information you need to know regarding the ACA and coverage for your child:

  • You and Your Child Can’t Be Turned Away for Pre-Existing Conditions: If you buy health insurance for yourself or a child during open enrollment period, your application for health coverage cannot be declined because you or your child have a pre-existing medical condition.
  • You Must Get Coverage for You and/or Your Child During Open Enrollment: Outside of the open enrollment window, it may not be possible to get ACA-compliant coverage for yourself or your child–unless you have experienced a qualifying life event (QLE).
  • Birthing or Adopting a Child Counts as a Qualifying Life Events (QLEs): Examples of qualifying life events include the birth or adoption of a child, marriage or divorce, the loss of employer-based coverage, or moving to a new coverage area. Qualifying life events trigger a sixty-day special enrollment timeframe for you and/or your child.
  • You Have 60 Days to Find Insurance After the Birth of Your Child: If you have a baby while you’re uninsured, you have 60 days to purchase an insurance policy for yourself and your child. If you buy coverage after your baby is born, coverage can typically start within 30 days.
  • Simply Getting Pregnant Doesn’t Count as a QLE: Although having a baby is considered a qualifying life event, getting pregnant is not. If you’re uninsured and become pregnant, that does not render you eligible to enroll in a new healthcare plan. You must apply for coverage during the nationwide Obamacare open enrollment period or within the sixty-day window following a qualifying life event.
  • Children Cannot Be Covered by Grandparents’ Health Insurance Policy: Grandchildren are not eligible for coverage on a grandparent’s policy (exceptions to this rule occur when grandparents have legal custody of their grandchildren).

1. Adding Your Child to Your Health Insurance as a Dependent

How Your Divorce Affects Your Child’s Health Coverage

Some health insurance plans charge additional premiums to continue health insurance for  children or an ex-spouse if one member of a newly-divorced couple has healthcare coverage through an employer and the other does not. Fortunately, group health insurance plans routinely allow divorced adults to continue insurance coverage for their family members. (Note: this can later change if one spouse later remarries and wants to include their new family on the policy).

Fortunately, state and federal laws offer protection to families in danger of losing healthcare coverage and neither an insurer nor an employer can deny court-ordered insurance coverage when children are involved.

2.  Health Insurance for Children Only

“Child-only” healthcare plans are individual market policies that are sold to children under the age of 19. Health insurance for children only, with no adults included in the policy, are not uncommon and are sold on private and public health insurance exchanges. This health insurance category does not include healthcare policies that are sold to adults with children as dependents. Rather, child-only policies are often sold to parents whose employers don’t provide dependent coverage, or to grandparents on Medicare who are the primary caregivers for children not otherwise eligible for public programs like CHIP or Medicaid.

Child-Only Plans: What’s Covered?

Child-only healthcare plans are ACA-compliant (with the exception of short-term policies that cover children) and as such, child-only health insurance plans are required to cover essential health benefits and are guaranteed-issue, meaning that your child cannot be denied coverage due to pre-existing conditions. In addition, child-only plans are required to cover:

    • Preventive care, at no cost;
    • Behavioral and oral health risk assessments;
    • Certain medications (fluoride chemoprevention supplements, gonorrhea preventive medication for newborns, and iron supplements);
    • STI testing;
    • Screenings; and
    • Immunizations.

Who Sells Health Insurance for Children Only?

Most health insurance carriers–both Marketplace and non-Marketplace –offer health insurance for children only. Under the Affordable Care Act, any insurer offering an individual healthcare plan to an adult must also make that plan available to an individual child, provided the child has not reached his or her 21st birthday at the beginning of the plan year. That said, child-only policies have become less common in recent years as a result of insurance market instability, so there may be fewer child-only offerings for parents to choose from.

Subsidies for Child-Only Plans

Parents and guardians whose incomes fall below a certain level and who lack access to employer-sponsored healthcare coverage may apply for subsidies to offset the cost of their kids’ health insurance. In nearly all cases, a parent or guardian can apply for subsidies as long that parent meets financial eligibility standards and is securing coverage for a legal dependent. Adults with employer-sponsored coverage cannot apply for subsidies to offset the cost of a child-only health insurance plan, even if the parent’s income (theoretically) is low enough for them to qualify.

Health Insurance for Children Only: Cost

Whether it makes financial sense for parents to purchase child-only coverage, as opposed to covering the child as a dependent, will depend upon parents’ individual financial circumstances, eligibility for tax subsidies, and the cost of health insurance options available to them. However, it’s important to note that a parent who is covered by an employer-sponsored plan usually cannot apply for subsidies to offset the premium and out-of-pocket costs of a child-only health insurance plan.

3. Government Health Insurance for Children

In the U.S., government health insurance for children comes in the form of two programs. These two programs work together to provide health insurance for  children in low- and middle-income families: Medicaid and the Children’s Health Insurance Program (CHIP).

Medicaid

Medicaid is run by individual states and is financed with both state and federal funding. Medicaid offers affordable coverage to people with limited incomes, including children, adults, pregnant women, people with disabilities, and seniors.

In most cases, kids can qualify for Medicaid coverage if they’re U.S. citizens or lawfully admitted immigrants–even if their parents are not. Children who have “aged out” of foster care can also be covered by Medicaid until they are 26 years old; these youth qualify for Medicaid coverage regardless of their income.

Children’s Health Insurance Program (CHIP)

Children’s Health Insurance Program (CHIP) provides health insurance for children whose parents make too much money to qualify for Medicaid. CHIP often helps families whose incomes are too substantial to qualify for Medicaid, but who nonetheless struggle to afford health insurance for their children.

Note that each state has its own name for its CHIP and Medicaid programs, so depending on where you live, these coverage options may be referred to using different terminology. Ohio’s Medicaid program for uninsured children (up to age 19), for example, is called Healthy Start. In Wisconsin, the Medicaid program for low-income residents is known as BadgerCare Plus. If you’re not sure what CHIP and Medicaid programs are called in your state, you can use this tool to find out.

CHIP and Medicaid Eligibility Requirements: Income / Family Size

CHIP and Medicaid eligibility is determined by family size and income, and eligibility guidelines vary from state to state. In most states, uninsured children under the age of 19 , and whose families earn up to about $47,700 annually, are likely to be eligible for kids health insurance.

Medicaid Expansion Under the Affordable Care Act

Twenty-eight states (including D.C.) have extended coverage to children in families earning annual incomes of or above 250 percent of the Federal Poverty Level (FPL).

While the Children’s Health Insurance Program (CHIP) was created to serve children, a few states extend CHIP coverage to parents and adults without children. Federal laws passed in 2000 and 2001 have allowed states with leftover CHIP funds to use those funds to provide healthcare coverage to low-income, uninsured adults who do not qualify for Medicaid. Currently, there are nine states which provide CHIP-funded coverage to parents (Arizona, Arkansas, Idaho, Minnesota, Nevada, New Jersey, New Mexico, and Wisconsin) and three states which allocate funds to cover adults without dependent children (Idaho, Michigan, and New Mexico).

In addition, several states, including Arizona, Illinois, New Jersey, and Wisconsin, use CHIP funds to cover parents in order to enable all family members to enroll in a single plan.

CHIP and Medicaid Eligibility Requirements: Age Limits

Young people up to 21 may be eligible for Medicaid. Youth who have “aged out” of foster care can be covered under Medicaid until they reach 26; there is no income limit for these youth.

CHIP and Medicaid Eligibility Requirements: Citizenship Status

Federal law restricts many legally residing immigrants from qualifying for Medicaid or CHIP coverage, or requires immigrants to wait five years before granting them access to coverage.

However, some states do provide Medicaid or CHIP coverage to legally residing pregnant women and/or children:

  • CA, CT, DE, DC, HI, ME, MD, MA, MN, NE, NJ, NM, NY, NC, TX, WA, and WI provide coverage to both legally residing pregnant women and children.
  • CO provides Medicaid/CHIP coverage to lawfully present immigrant pregnant women only.
  • MT, IA, OR, RI, and VA provide Medicaid/CHIP coverage to lawfully present immigrant youth.

At present, Deferred Action for Childhood Arrivals (DACA) is not an eligible immigration status for applying for health insurance, as federal law prohibits undocumented immigrants from either enrolling in Medicaid or CHIP programs, or shopping in the government marketplaces.

CHIP and Medicaid Eligibility Requirements: Pregnant Women

  • Pregnant women earning below particular income levels are eligible for Medicaid and/or CHIP coverage. In addition, federal regulations require states to extend coverage to women for at least 60 days postpartum.
  • Unborn Child Option (CHIP-Funded): The ‘unborn child option’ permits states to consider a fetus as a qualifying child for purposes of CHIP coverage, regardless of the mother’s immigration or citizenship status.

Find Out If You Qualify

HealthCare.gov offers a tool to help you determine whether you qualify for CHIP and Medicaid programs in your state. Use their chart to see what coverage options are available, based on your income and family size.

What Healthcare Services Are Covered?

Regardless of where you live, all CHIP programs are required to provide children with the following healthcare benefits:

  • Doctor visits and routine checkups;
  • Free immunizations;
  • Prescription drug coverage;
  • Hospital care (both inpatient and outpatient);
  • Lab work and X-rays; and
  • Emergency/urgent care.

How Much Does CHIP Coverage Cost?

CHIP costs vary by state and also depend on your annual household income. This tool can provide you with an accurate estimate. Many families can get free health coverage for their children–it all depends on your household income. Some families may be required to pay a modest enrollment fee or premiums, and copayments for specific services.

Once a child is signed up for CHIP, preventive care–such as well-child checkups and immunizations–are free of coinsurance charges. If your child gets sick or injured, you may need to pay a small amount in coinsurance in exchange for healthcare services.

How Do You Enroll in CHIP?

Unlike other marketplace healthcare plans, CHIP does not have an open enrollment period and eligible individuals may apply for CHIP during any time of year to secure coverage for their children.

There are two ways for parents, grandparents, or legal guardians to apply for CHIP coverage:

  1. Enroll in CHIP over the phone by calling +1(800) 318-2596 [TTY: (855) 889-4325] or
  2. Fill out an application for CHIP online through the federal health insurance marketplace.

Health Insurance for Youth in Foster Care

Former foster youth are eligible for Medicaid until they reach age 26, provided that they turned 18 (or older under their state’s child welfare plan) and were enrolled in Medicaid while they were in foster care.

This article provides more information about foster youth and Medicaid eligibility.

4. Short-Term Health Plans: Temporary Health Insurance for Children

Short-term health insurance or short-term medical (STM) plans are 30- to 90-day health insurance policies, and they provide consumers with an affordable way to pay for healthcare for a brief period of time, such as when they experience a gap in coverage, or anticipate being uninsured for a short duration.

When Does It Make Sense to Buy Short-Term Health Insurance for Children?

There are a number of situations when it would make sense for a parent or guardian to buy short-term health insurance for children. Parents can use short-term health insurance to ensure their child has medical coverage if they’re in-between jobs, or in a benefits waiting period at a new workplace. Short-term health insurance can also serve as a temporary coverage solution for your child while he or she is waiting to be accepted into CHIP, or another medical plan.

One reason short-term health insurance plans are advantageous: coverage can take effect right away. For this reason, STM plans can be a great last resort or last-minute solution, as applications for STM plans can be filled out and processed online. When you apply for short-term coverage for your child, you’ll be asked to answer a series of questions about your child’s medical history, and your child’s coverage starts as soon as your application is processed and accepted. Parents can use our plan comparison tool to determine which short-term policies are available in their area.

Not Everyone Qualifies for Short-Term Coverage

To be sure, short-term plans are relatively cheap–but not everyone qualifies for them. Insurers aren’t required to cover pre-existing conditions with these plans, so qualifying for this type of coverage will be difficult if your child is ill, or suffers from chronic health conditions. Moreover, short-term health insurance is  not meant to cover the cost of your child’s healthcare for long periods of time and these plans are not an appropriate substitute for more comprehensive insurance coverage.

These Plans Aren’t ACA-Compliant

Because short-term plans do not meet the minimum standards for insurance coverage laid out by the ACA, short-term plans are unlikely to cover all the care your child requires. While major healthcare policies that are ACA-compliant are required to cover ten categories of essential health benefits, including maternity care, prescription drug coverage, immunizations, and mental health services, short-term plans are not required to cover these categories of care for your child.

5. Kids’ Dental Coverage

Pediatric dental coverage is considered “essential,” but not “mandatory,” under the ACA.

Except for in Kentucky, Nevada, and Washington (the three states which require parents to purchase stand-alone dental coverage for their kids), healthcare plans sold on the federal and state exchanges have to offer pediatric dental coverage–but parents are not required to purchase it.

If you’re shopping in the government Marketplace, there are two different ways to get dental coverage: 1.) as part of a health plan or 2.) by itself, through a separate, stand-alone dental plan. That said, it’s important to note that consumers cannot buy a stand-alone dental plan by itself; to purchase a stand-alone dental plan, you must buy a healthcare plan at the same time.

Here’s what you need to know about the Affordable Care Act and children’s dental coverage:

  1. Pediatric Care Is an Essential Health Benefit: Pediatric dental care is counted among the ACA’s 10 essential health benefits, and must be included in all major medical health insurance plans sold through the state and federal exchanges, as well as in the private market;
  2. Dental Must Be Available to Those 18 and Under: Because it is an essential health benefit, dental coverage must be available to children 18 and younger as part of a major health insurance plan, or as a standalone plan; and
  3. Parents Aren’t Necessarily Required to Buy Dental Coverage for Their Kids: Parents (except for  those living in Kentucky, Nevada, and Washington) are not required to buy dental insurance for their kids—it is optional and there is no penalty for going without it; however, as mentioned above, many health insurance plans include dental coverage.

For more information about dental insurance plans, refer to this page, which outlines different types of dental coverage.

Taking the Next Steps

You can evaluate your child’s health coverage and see if it’s the best option.

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