Child's Health Insurance Claim Denied: Parent's Guide

When an insurance company denies a claim for your child, the stakes feel especially high. The good news is that children have some of the strongest legal protections in the entire U.S. healthcare system — including rights under the ACA, Medicaid's EPSDT mandate, and CHIP that many parents don't know about.

Types of Children's Health Insurance

Children are covered under several different types of plans, each with its own rules:

Parent's employer-sponsored plan (ERISA). Most children are covered as dependents on a parent's group health plan. These plans are governed by ERISA at the federal level, with ACA consumer protections layered on top.

ACA marketplace family plan. For self-employed parents or those without employer coverage, marketplace plans cover children as dependents. ACA protections apply fully.

Medicaid. Children from families with incomes up to 138% (and often much higher) of the Federal Poverty Level may qualify for Medicaid. Medicaid provides comprehensive coverage for children, including the EPSDT benefit described below.

CHIP (Children's Health Insurance Program). CHIP covers children in families with incomes too high for Medicaid but who still can't afford private insurance. Coverage and eligibility thresholds vary by state.

Standalone pediatric dental and vision. Under the ACA, pediatric dental and vision are essential health benefits for children, though they may be offered as standalone plans rather than included in medical coverage.

The ACA's Pediatric Essential Health Benefits

Employer-sponsored and marketplace plans must cover pediatric essential health benefits — services specifically required for children:

• Pediatric preventive care: Well-child visits, immunizations, developmental screenings, vision and hearing tests — all at no cost to you.
• Pediatric dental services: Routine and preventive dental care must be available to children, though it may be in a separate plan.
• Pediatric vision services: Eye exams and corrective lenses for children.
• Mental health and behavioral health services: Including therapy for autism spectrum disorder (ABA therapy), ADHD, depression, and anxiety.

If your child's insurer denied any of these services, it may be violating the ACA's essential health benefit requirements.

EPSDT: The Medicaid Gold Standard for Children

Children enrolled in Medicaid receive one of the strongest benefit packages in American healthcare: the Early and Periodic Screening, Diagnostic, and Treatment (EPSDT) benefit. Under EPSDT:

• Medicaid must cover any service that is medically necessary for a child, regardless of whether the state's adult Medicaid plan covers that service.
• States must provide periodic screening, vision, hearing, and dental services to all Medicaid-enrolled children.
• If a screening reveals a need for treatment, Medicaid must cover that treatment.

EPSDT denials are especially worth appealing. The scope of EPSDT is extremely broad — courts have consistently interpreted it to require coverage of services when a child's treating physician deems them medically necessary, even if the service is unusual or experimental.

CHIP Appeal Rights

CHIP programs are state-run but federally funded. Your CHIP appeal rights depend on your state, but federal regulations require:

• Written denial notices explaining the reason and your appeal rights.
• An internal appeal process with the state or its contracted insurer.
• A fair hearing with the state Medicaid/CHIP agency if you disagree with the internal appeal outcome.
• Access to information about your child's case file.

If the CHIP denial involves a clinical decision, request that the appeal be reviewed by a clinician with relevant expertise, not just an administrative reviewer.

Common Denial Reasons for Children's Claims

ABA therapy for autism denied. Applied Behavior Analysis (ABA) therapy for autism spectrum disorder is one of the most commonly denied benefits for children. Under Mental Health Parity Act (MHPAEA) Explained" class="auto-link">MHPAEA, behavioral health treatments must be covered at parity with medical services. Most states also have autism insurance mandate laws requiring ABA coverage.

Developmental pediatrician or specialist referrals denied. HMO and EPO plans may deny specialist referrals for developmental evaluations. Challenge these denials with documentation from your pediatrician.

School-based health services. Medicaid reimburses certain health services delivered in school settings (screenings, mental health services, nursing services). If a school-based service was denied, contact your state Medicaid agency.

Speech, occupational, or physical therapy denied. Plans often impose visit limits on therapy services. Under MHPAEA, limits on behavioral therapies must be comparable to limits on medical therapies.

Dental care under medical plan. Some parents are surprised to learn pediatric dental may need to be purchased as a separate plan. Check whether your child's dental needs are covered under your medical plan or require separate enrollment.

How to Appeal a Denial for Your Child

1. Obtain a letter of medical necessity from your child's pediatrician or specialist. For conditions like autism, developmental delays, or complex medical needs, a thorough letter from the treating clinician is your most powerful tool.

2. Cite specific ACA, EPSDT, or state mandate protections that apply to your child's denied service.

3. Request the clinical criteria used to deny the claim. Insurers must disclose what guidelines they applied.

4. For CHIP/Medicaid denials, request a state fair hearing. These hearings are less formal than court proceedings but give you a direct opportunity to present evidence.

5. Contact your state insurance commissioner for private plan denials, or your state Medicaid agency for CHIP/Medicaid denials.

Your child's health is worth fighting for — and the law gives you strong tools to do it.

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Related Reading:

• How to Write an Insurance Appeal Letter
• What Is Medical Necessity?
• Internal vs External Insurance Appeal