Kids and Health Care: Applying for Insurance

Finding a good pediatrician -- who will work with your insurance company -- is one of the great challenges of raising children. Some parents feel strongly enough about their kids' doctor that they would rather change insurance companies than change pediatricians. That's high praise. And it may mean changing insurance companies several times over.

At this point, it may be worth discussing exactly what happens when you change insurance policies.

The main challenge here is actually applying for the new coverage. If you're simply changing policies within a menu offered by your employer or industry group, the application isn't quite so difficult; but, if you're buying insurance on your own, it can be daunting.

We'll consider the daunting version.

To get an accurate quote for health insurance, you'll have to fill out an application. It's very important that you do this completely and correctly. If you lie on the application, the company can not only deny you coverage for a problem down the road, it can rescind the policy entirely. And, most companies can get your medical information anyway through a non-profit association called the Medical Information Bureau (MIB).

Before you apply for insurance, it might be a good idea to check if there's a report on file for you, it's at no charge. And, if there is one and it's wrong, you can correct it. Just telephone them at (617) 4263660 and ask for your free report.

The application for health insurance also will ask for your age and health history. Most insurance companies will ask your doctor for your medical records, and they may require you -- and, on rare occasions, your kids -- to undergo a physical with one of their doctors or even get additional blood tests. (However, they can't conduct an HIV test.)

You will have to let the insurance company know about pre-existing conditions. The company will want to know what illnesses and health problems you have had during the last couple of years (possibly longer). Most insurance companies would prefer not to pay you for treatment for a pre-existing condition, such as an ulcer or a gallstone. However, they are usually required by law to cover pre-existing conditions eventually -- usually after six months to a year.

The MIB was formed in 1902 by a group doctors who were also medical directors at several, large insurance companies, to centralize health related information on individual applicants and reduce the potential for fraud. Today, the MIB maintains medical information on approximately two out of every 10 applicants for health, life or disability insurance.

An insurance company also may restrict certain benefits for a set period of time. For instance, it may not cover expenses related to a pregnancy until the coverage has been in effect for one year. If you're already pregnant, this would be treated as a preexisting condition. So, if you're planning on becoming pregnant, you'll want to get your health coverage sorted out as far in advance as possible.

If you've had a serious pre-existing condition, such as cancer or a heart attack, an insurance company may not want to cover you at all. Or it may require you to sign a waiver. This is a rider or amendment to a policy that restricts benefits by excluding certain medical conditions from coverage. (However, some states have begun to prohibit this practice.)

Your age also is an important factor in pricing and obtaining insurance. Many insurance companies have age "bands," when it comes to costs for coverage. For instance, everyone age 21 to 25 may fall into one price range, and everyone 26 to 30 would cost a bit more to insure. Family policies are based on multiples of the primary insured person's band.

Insurance companies prefer to write policies for young, healthy people -- and they prefer to stay away from older, less healthy people. So, it pays to pick a good plan when you're relatively young and stay with it, if you can.

Some companies allow you to change your mind and get your money back after you purchase health insurance -- but only if the policy has a "free look" or review period, which typically ranges from 10 to 30 days. So, you'll want to read your policy as soon as you get it.

You may even want to ask your pharmacist and your doctor how different plans are handled before you sign up. They should be more than happy to tell you which companies and which plans are easy to work with, and which ones make life difficult for them and for their patients.