Comprehensive Coverage Available to Children Nationwide, but Choice May Be Limited

Individual policies are available to children nationwide, and products that are priced specifically for children are available in almost all states. The benefit structure for child-only products was similar to comprehensive products typically available to adults in the individual market. Furthermore, some carriers do not tend to operate in states with certain regulatory requirements. Products Available Nationwide

As long as an adult is the policyholder and is responsible for the premium payment, almost all of the carriers we contacted in the individual market will sell a product that provides comprehensive coverage for a child only. We found that at least one individual comprehensive health insurance product is available to children in all 50 states. Most insurance agents and brokers we contacted in Georgia and Illinois were generally aware that these products are available from a number of carriers. Among the seven carriers we reviewed, child-only products represent a relatively small share of the carriers’ total individual health insurance sales—from under 1 percent to 20 percent. Thirteen states require carriers to guarantee-issue certain products to all applicants. Carriers also take into account the expected health care utilization of different age groups and the impact of various state regulations in calculating their premium rates. For the products we reviewed that are available to children, we found standard monthly premium rates for a healthy 15-year-old among our selected carriers ranged from a national low of about $42 for a $1,000 deductible PPO plan in Portland, Oregon, to one as high as $321 for a $250 deductible FFS plan in Los Angeles, California. Even within particular markets, there were substantial differences in the premium prices of products that carriers offered. We identified several factors that affect monthly premium rates for child-only products: age and number of covered children in a family and their expected health care utilization; geographic location and state regulations; and plan type and design, including deductible and cost-sharing options. Medical Underwriting May Preclude Coverage for Children With Certain Health Conditions

While most children qualify for coverage at the standard rate, children with certain health conditions can be denied coverage, or their coverage may exclude an existing condition or treatment of certain parts of the body, or they may be charged a rate higher than the standard premium rate in states that allow medical underwriting. Furthermore, as previously mentioned, two of the carriers we reviewed that market specifically to children told us that they do not cover children during their first 6 or 12 months of life due, in part, to the lack of information about a child’s potential long-term health status. 1.) Conclusions

Although comprehensive health insurance coverage is generally available for healthy children in the private individual market across the United States, consumers would do well to shop carefully for the child-only product that best meets their needs.
Why GAO Did This Study

Pursuant to a congressional request, GAO reviewed the availability of private sector health coverage for children in the individual insurance market, focusing on: (1) the availability and characteristics of private health insurance products that can be purchased only for a child and how these products differ from other individual private insurance products; (2) the costs of these child-only products; and (3) any barriers in access to individual private health coverage for children.

What GAO Found

GAO noted that: (1) comprehensive health coverage is available to children in the individual health insurance market across the United States; (2) at least one comprehensive product is available to most children in all 50 states; (3) in almost all states, a product that is priced specifically for children is available; (4) the insurance agents and brokers GAO contacted in two selected states were generally aware that products for children existed and could either sell the products themselves or refer GAO to someone who could; (5) the benefits covered under these products typically mirror those of products available to adults in the individual market; (6) while these products were available nationwide, among the carriers GAO contacted they represented a relatively small share of total individual sales--from under 1 percent to 20 percent; (7) furthermore, since many carriers do not tend to operate in states with certain regulatory requirements, consumers may have a more limited choice of benefit plans and carriers in these states; (8) as is the case with products for adults in the individual market, costs for child-only products varied considerably, both within and across selected markets; (9) standard monthly premium rates for the products GAO reviewed that are available to children are based largely on age, geographic location, plan type, and product design, including deductible and cost-sharing options; (10) in calculating rates, carriers also take into account the expected health care utilization of different age groups and the impact of various state regulations; (11) GAO found standard monthly premium rates for a healthy 15-year-old among its selected carriers ranged from a low of about $42 for a $1,000-deductible preferred provider organization plan in Portland, Oregon, to one as high as $321 for a $250-deductible fee-for-service plan in Los Angeles, California; (12) while these child-only products are available in all states--as is typical in the individual insurance market--many states do not require carriers to accept all applicants; (13) in these states, children with certain health conditions may be denied coverage, or their coverage may exclude an existing condition or treatments for particular parts of the body, or they may be charged a rate higher than the standard premium rate; and (14) of the carriers that GAO reviewed, two that market specifically to children do not cover children under these policies during their first 6 or 12 months of life, due to the high cost of early preventive care and lack of information about a child's possible future health problems.