Children Raised by Grandparents Facing Health Insurance Crisis

With the passage of last year's federal health care overhaul, many families breathed a sigh of relief because it meant their children could no longer be denied health coverage because of pre-existing conditions.

Yet, however well-intentioned the pre-existing condition provision was, it has actually produced an unforeseen fatality: The child-only insurance policy.

Instead of extending additional coverage to all children under 19 who were deemed previously uninsurable, health insurance companies throughout the country are now refusing to cover children who are not covered by a family-member's policy, the Texas Tribune reports.

One of the groups being hit hard by the elimination of the child-only insurance policy are children who are being raised by their grandparents, when they're not poor enough to qualify for Medicaid and have no insurance from an employer or a family policy to give them coverage.

Both approaching 65 and the switchover to Medicare -- federally-funded health coverage for seniors -- Phillip and Diann Green, of Forney, Texas, face the staggering problem of finding health coverage for their 12-year-old granddaughter, Aria, whom they have been raising since she was 7 months old.

"Raising a child - finding her health insurance - it's certainly not something you expect at our age," Green tells the Tribune. "But everybody has come up with an excuse for not taking her."

The Greens never suspected that reaching the age of retirement would lead to problems finding health insurance for Aria, who is currently insured under Diann Green's policy from her employer, Walmart. But, ultimately, each of the health insurers operating in Texas turned them down because they no longer had child-only policies, the Tribune reports.

So, Aria is left with few choices, as the Greens' income level does not qualify her for the state-federal Children's Health Insurance Program; and, she is not eligible for a federal high-risk insurance pool because it requires a child to have a pre-existing condition -- which Aria does not -- and a formal denial from a private insurer. But insurers don't have to issue a denial when there is no plan offered.

At this point, Aria's only option for coverage when her grandmother retires is to move to the Cobra plan for her current policy from Wal-Mart, which costs $550 per month and will only cover her for 18 months.

While there is no way to calculate how many children are affected by the elimination of child-only health plans, the Tribune estimates that there are thousands in Texas alone.

Jared Wolfe, executive director of the Texas Association of Health Plans, tells the newspaper that the child-only plans aren't being pulled because insurance companies don't want to cover children, but because the pre-existing condition clause has created an "unworkable financial scenario" for insurance companies. Since the provision has been interpreted to mean insurance companies have to cover any child who applies, Wolfe says it effectively ensures only sick children will apply for coverage.

In some states, like Texas, lawmakers have turned to legislation to battle the insurance companies and to force insurers who cover individuals to extend coverage for children under 19. The Texas bill is similar to laws already passed in California, Kentucky, New Hampshire and Washington; yet it's doubtful that the bill will pass in Texas, where the Republican majority in the state Legislature believes that the child-only insurance market should "work itself out," the Tribune reports.

The Tribune reports that the Texas Department of Insurance is searching for ways to "entice" insurers into offering child-only coverage, while some insurers say they are looking for a compromise.

But none of this means anything for Aria right now.

"Everyone I talk to about this, their response is, 'What would you like for us to do about this?'" Phillip Green says. "I just want them to fix it."