Tonik Health Insurance: Still a good option for young people?

By: Naya Jones

With health care reform moving forward, will Blue Cross Tonik health insurance still be the obvious choice for young people? For the last 5 years Tonik health insurance was the most popular plan with single individuals under 39 years old in the six states in which they operate (California, Colorado, Connecticut, Georgia, New Hampshire, Nevada). If the proposed health insurance bill passes, Tonik still may be the best choice. In the short term, this will be definately true. Here is why: The bulk of the reform efforts are set to take place in 2014. The main changes to take place before then only seem to enhance Tonik. We have listed the three main provisions below with our understanding how they will impact Tonik health plans.

1) No lifetime payment caps on insurance plans

The bill says that no plan within 6 months of approval cannot have a maximum payout limit.  Tonik currently has a $5 million dollar lifetime payout so this change would only improve the plan.

2) Reduce ability to rescind coverage

Rescission is a controversial topic where health insurance companies can cancel your plan if you have withheld any medical information in the application. While this has happened to less than 1/10 of 1 percent of members in the past,  it will no longer be allowed in the future unless the company can prove there was intended fraud. By reducing the ability of health insurance companies to rescind plans, the heath care reform only makes Tonik health insurance better.

3) Adult children to age 26 can be considered dependents on their parents plan

This is probably the biggest change to affect Tonik. If you qualify, you can stay on your parents plan longer than ever before.  While the law will force insurance companies to expand this coverage, there is no cap on the price to have older dependents. Insurance companies will probably charge a lot of money to keep adult children on their parents plans because the bulk of those who exercise this option will have pre-existing conditions. If you think about it, someone 25 years old who is still on his/her parents plan probably means they cannot qualify for individual health insurance. Without being too technical, this is called adverse selection and will raise the rates for all dependents on their parents plans.  Tonik, on the other hand, will still have an approval process. While its no fun to be turned down for health insurance, the pool of approved applicants on any plan with underwriting are healthier and therefore less expensive to insure.

As more details of the proposed plan become clear, we will keep you updated. To learn about the proposed penalty for not having health coverage check out