Child Only Plans

What are your options if your employer provided health insurance does not cover autism treatment? In Maryland, you may purchase a child only plan from the exchange, a broker or directly from a carrier. But first, there are many considerations you need to make to determine if it is the right choice for your family and your budget. 

Questions for your Employer

Are you allowed to carry a second policy for your child?
If your child is covered by both policies, the individual plan is typically primary. You must file a claim with your primary insurance first. You may file a claim with the secondary policy only after you have received payment from your first coverage and there is additional out of pocket cost or if you receive a denial from the primary. If your employer does not allow duel enrollment then you will have to remove your child from the employer policy in order to purchase a child only plan.

Can you remove your child mid-policy year?
Employer open enrollment does not always coincide with the individual market open enrollment. Since many employer plans allow you to contribute using pre-tax dollars through a Section 125 (POP) plan you may not be able to terminate your coverage mid-policy year. You may have to carry overlapping policies until your employer’s open enrollment period at which time you can remove the child. The cost of this is something you will have to consider.

Understanding the Terms

It’s important to understand the various cost of insurance in order to make the best decision for your budget. You should annualize all these expenses to determine the best option.  Higher monthly premiums could mean lower deductibles and maximum out of pocket. Let’s look at the terms and how they affect your wallet.

Premium
Monthly cost of the policy.

This amount does not count towards your maximum out of pocket. You will pay this monthly, even when your deductible and maximum out of pocket are met. Unlike the cable provider, insurance premiums offer NO grace period.  A late payment, even by a day, will result in termination. Reinstatement of the plan is NOT an option even if the premium is paid just a few days late. This bill needs to be the one that is always paid on time every month, no exceptions. Plans with the lowest premium are not always the best economic choice. Higher premiums often mean lower deductibles and maximum out of pocket.

Deductible
The amount you owe for covered health care services before your health insurance plan begins to pay. For example, if your deductible is $1,000, your plan won’t pay anything until you’ve paid out $1,000 for qualified services. Some plans pay for certain health care services before you’ve met your deductible.

Autism treatment is expensive. It is very likely you will reach your deductible within the first quarter, maybe even the first month. If you choose a plan with a $5,000 deductible your budget MUST be able to absorb that expense, along with the premium and all your other monthly expenses, in the first month or two. For most of us this is not doable, therefore a lower deductible may be the best choice.

Maximum out of pocket (MAX OOP)
This is the maximum amount you will pay out. It includes your deductible, co-insurance, co-pays and prescription costs. It DOES NOT include your monthly premium. A child receiving intensive treatment for autism will likely reach the maximum out of pocket

Co-insurance
Your share of the costs of a covered health care service, calculated as a percentage (for example, 20%) of the allowed amount for the service. You pay coinsurance after you’ve met your deductible. For example, if the health insurance plan’s allowed amount for an office visit is $100 and you’ve met your deductible, your 20% coinsurance payment would be $20. The health insurance plan pays the rest.

Co-pays
A fixed amount (for example, $15) you pay for a covered health care service, usually when you get the service. The amount can vary by the type of covered health care service. Specialist co-pays are typically higher than primary care visits. Autism treatment can be intensive and may require 2 – 4 visits per week. Don’t forget your prescription co-pays.

Talk to Your Provider

Get a sense from your provider on the number of visits per week so that you can budget your weekly out of pocket cost. For example, if your child will have 3 visits per week at $40 each visit that is $120.00 per week until the Deductible is met. Using this example that’s about $500/month. Knowing your expected out of pocket cost will help you budget. Once your deductible is met then your co-insurance and co-pays kick in.

Before selecting a policy, ask your provider which carriers and policies they have contracts with and a good history of being reimbursed for services. It is important to know the carrier name (CareFirst, United, etc.) and the policy name (Healthy Blue, Blue Choice, Choice Plus Insurance, etc.). Providers don’t always take all the products a carrier sells so it is important to be specific.

Do not use a non-participating provider. The whole point in selecting a Child Only plan in addition to your employer provided plan is to help make treatment affordable. You will incur increased out of pocket cost using non-participating providers.  The amount a non-participating provider charges above the in-network plan allowance will be your responsibility and does not count towards your deductible or MAX OOP. Therefore, you will have to keep paying out of pocket even if you somehow reach the max out of pocket on other services. This is not a cost effective plan.

Do the Math

Make sure to look at all the expenses and annualize them. Don’t look at it on a monthly basis (other than determining how much of a deductible you can pay out in the first one- three months). Compare this number to the cost of paying out of pocket for the services.

comparison chart
The above is an example. Look at the policies you are considering from the open market and fill in the amounts.

Remember to look at these same expenses for your employer provided plan that is covering the rest of your family. You need to consider the expenses associated with carrying your employer plan and paying out of pocket for autism treatment to the expense of carrying two policies. Depending on how intensive your child’s treatment plan is a second policy may be the right choice for your budget. And remember, the employee contribution on an employer provided policy is often pre-tax dollars, a cost savings benefit to you. When you purchase a policy on the open market, it is with post tax dollars.


Sources

Jaclyn Lorden, Executive Vice President of Operations, Meltzer Group Benefits

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