Health Insurance for Children with Disabilities

For many, the first stop for financial support for children with disabilities is some form of medical insurance to cover medical costs. Insurance plans intended to cover the medical costs of a child with a disability are often not as robust as they should be. There can be undue strain on the child and the family’s finances. Insurance plans take many different forms and each comes with their own benefits, limitations, and restrictions.

Health insurance is often distributed privately, provided to individuals through employers or other organizations. Private insurance plans may be set in place by an employer, or an employer may give individuals an option to choose their insurance plan.

In circumstances like these, it is crucial to know the costs and benefits of the different types of insurance plans to decide which suits the needs of your family most closely. You may want to speak with a benefits administrator, insurance coordinator, or human resources staffer about your questions and specific plan options. Additionally, many insurers have online account management services that may help you understand the benefits and limits of your plan, and keep track of deductibles and other important matters.

Also known as “fee-for-service” plans, indemnity insurance plans allow individuals to decide where and who they would like to receive healthcare from; there is no defined “network” of providers. With an indemnity plan, insurance companies pay a set portion of an individual’s total medical charges, and the individual is responsible for the remaining fee.

An indemnity plan allows for a great amount of flexibility, but often requires more out-of-pocket charges than other private insurance plans. Indemnity plans usually come with set caps on the amount of money paid out over a person’s lifetime. This may be less than ideal for individuals with disabilities.

Managed care can look very different depending on the particular plan elected and the parties involved. Generally, managed care plans tend to prioritize financial ease over the ability to choose providers. There are three main types of managed care:

• Health Maintenance Organizations (HMOs): This type of organization offers a wide range of services provided through a predefined network of healthcare professionals. These plans usually have a fixed monthly fee, leading to fewer out-of-pocket expenses. HMOs require individuals to elect a primary care physician responsible for the majority of their healthcare needs. Under this plan, individuals need a referral from their primary care physician in order to see a specialist of any kind. For example, if your child needs to see a gastroenterologist, he or she would first need to visit their primary care physician, who would write a referral to see that specialist.  With HMOs, using healthcare outside of the defined network can be very expensive.
• Preferred Provider Organizations (PPOs): This type of plan allows members to see any physician in the network without a referral from a primary physician. For example, your child could visit an in-network hematologist without seeing a primary care doctor first. Unlike HMO plans, PPOs do not require pre-payment, so users pay only for the services they use. PPOs are usually more expensive than HMO plans, but they allow more flexibility with regards to providers, even covering a small portion of select out-of -network service.
• Point of Service Plan (POS): These plans combine aspects of HMO and PPO plans. Members are required to elect a primary care provider who can make referrals for them. Like in PPO plans, POS plans often allow for out-of-network care at a higher price than in-network care. In this case, if your child saw a physician outside of your network, the plan might pay for a small portion of the cost, compared to the large portion of coverage provided for an in-network physician.

Many people have private insurance plans through their employers. For those who don’t receive employer-sponsored insurance or for those who can’t afford it, there are other sources of insurance available. Many of these programs are funded by local, state, or federal government departments, while others are supported by other large organizations. Non-private insurance plans often reach a wider consumer base, but coverage is limited based on factors like income and financial need. Some non-private insurance options are:

• Medicaid: Medicaid is a government-funded, public health insurance program administered by state governments. This program is intended to assist low-income families, pregnant women, elderly individuals, and people with disabilities. There are certain general groups that fit the eligibility criteria for Medicaid benefits, they include:
  • Low-Income families
  • Low-income pregnant women, infants, and children
  • Individuals receiving Supplemental Security Income (SSI)
  • Individuals who are blind or have disabilities

For a full list of eligible individuals, visit Medicaid’s list of eligible groups.

Once an individual is considered eligible for Medicaid, he or she may begin to receive the benefits offered by the program. Some benefits vary based on state and on individual Medicaid contracts, but some of the benefits may include:

• Inpatient/Outpatient hospital services
• Early and Periodic Screening, Diagnostic, and Treatment service (EPSDT)
• Nursing facility and home health services
• Physician, clinic, and health center services
• Laboratory and X-Ray services
• Family planning, pediatric, and birth center services
• Transportation to medical care

• Children’s Health Insurance Program (CHIP): CHIP is a program that works to help children get access to health coverage. The organization works with Medicaid and  independent programs. CHIP primarily helps children from families who are not eligible for Medicaid due to their income but still demonstrate financial need. Individual coverage options vary immensely and are often adjusted based on state.
• Medicare : Medicare is a program designed to help individuals over the age of 65 (and certain individuals under the age of 65 who have a disability) with their medical care. Like Medicaid, Medicare follows certain eligibility criteria, people are generally eligible if they are:
  • Over the age of 65 and eligible for Social Security
  • Permanently disabled and have been receiving disability benefits for 2+ years
  • Have Lou Gehrig’s disease

Medicare benefits depend on individual circumstance and the portions of the program you may be involved with. Since coverage differs, it may be helpful to do a personalized search to assess what Medicare covers for your particular situation.

For children with disabilities, an insurance plan can provide needed benefits. However, there still may be things that will not be covered by insurance (like attendant care at home and home modifications) that become out-of-pocket expenses for the family. Important benefits not usually covered by insurance include:

• 24 hour attendant care
• Long-term care
• Alternative medicine (e.g. chiropractor, acupuncture)
• Plastic surgery
• Weight loss / bariatric surgery
• Daily or weekly physical therapy
• Daily or weekly speech therapy
• Daily or weekly vision therapy
• Daily or weekly occupational therapy
• Service animals and recreational therapy

In addition, a new bill called the American Health Care Act (AHCA) has been proposed in the House of Representatives. Under these proposals, people who use both private and public insurance to help fund their healthcare will undergo some major changes. There are two main areas that are subject to change under the proposed healthcare bill that may directly impact the lives of children with disabilities and their families:

1. The proposed bill will increase the number of conditions that are considered “pre-existing,” adding on conditions like C-section, postpartum depression, and more.  Pre-existing conditions can cause the price of health insurance to increase. This could impact families of children with disabilities like cerebral palsy or hypoxic-ischemic encephalopathy (HIE) by increasing the amount these families will have to pay to cover the cost of the care they need.
2. The proposed bill also plans to provide states with “block grants” for their Medicaid allotted money, rather than paying for a set percentage of the state’s Medicaid costs. This essentially puts a cap on the amount of money a certain state can spend on Medicaid for their citizens. Under these circumstances, it is possible that a state’s allotted amount of money could run out, leaving people with disability expenses vulnerable.

• More Information about Funding Healthcare
• 7 Tips for Special Needs Financial Planning (By Kacy Seitz)