Children’s Access to Low Cost Medical Insurance is More Limited « Health Insurance Advisory

Welcome to the New Healthcare Law Center and State News

new healthcare reform lawThe new healthcare law, called the Patient Protection and Affordable Care Act (PPACA), represents comprehensive healthcare reform legislation signed into law on March 23, 2010. It contains numerous provisions designed to protect consumers and promote low cost medical insurance, including many new taxes to pay for the cost.

In this section of the site, you can also obtain the following information specific to your state: available medical insurance options, efforts to regulate medical insurance premiums, healthcare, the individual medical insurance marketplace and the new healthcare law.

Our objective is to help Americans make sense of the new healthcare law by explaining key provisions in plain English and assisting individuals, families and the self-employed in using this information to find and secure affordable medical insurance.

Children’s Access to Low Cost Medical Insurance is More Limited

There are fewer child only medical insurance plans available to parents who are looking to secure low cost medical insurance coverage for their children, according to the Senate Health, Education, Labor and Pensions Committee’s new report.

As the Heritage Foundation explains, the reason for the decline in child only medical insurance plans are specific provisions of the new healthcare law, called the Patient Protection and Affordable Care Act (PPACA). New rules regarding medical insurance plans for children have made it more difficult for health insurance companies to continue offering child only health insurance. PPACA created what is commonly known as a “guarantee issue” requirement for children. This means that health insurance companies cannot deny children less than age 19 medical insurance because of a pre existing health condition. As a result, it becomes financially unsustainable for health insurance companies to continue to offer child only health insurance due to adverse selection.

Requiring health insurance companies offer child only medical insurance to anyone at any time allows parents to wait until their child is sick and then purchase health insurance. This undermines one of the fundamental principles of insurance, which allows individuals to manage risk by pooling resources to help pay for future, unpredictable expenses. If an individual can avoid paying premiums until they know they will incur an expense, it is impossible for such an insurance system to be financially sustainable. It is like trying to buy homeowner’s insurance while your house is on fire.

If healthy individuals forgo medical insurance, then only the sickest individuals are left in insurance pools which increases the cost for all health insurance companies. This further drives up health insurance premiums and discourages healthier individuals from participating. This is aptly referred to as the insurance “death spiral.”

The effects of prohibiting pre existing condition exclusions for the child only health insurance market will impact all covered individuals in 2014, when the same rules will also apply to adult or family medical insurance plans.

To learn more about the impact of the new healthcare law on you and your family, visit our healthcare reform blog.  Our goal at healthinsuranceadvisory.org is to help you find and secure low cost medical insurance and inexpensive dental insurance. We make it easy for you to shop and compare health insurance with leading health insurance companies in your state. Get started saving money today and ensure that you and your family have adequate financial protection.

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