Affordable Health Insurance Texas
Affordable Health Insurance Texas

Health Insurance Services


 
 
Affordable Health Insurance Texas

Frequently Asked Questions


BASICS

What is the basic difference between individual and group health insurance coverages?

An individual policy is purchased by you directly with the insurance company.

With a group health insurance policy, the company contracts with the group and the master insured is the group. Certificates are issued to each participating member, which would act as your policy. If the insurance company was to sell an individual policy to each member, it would cost more money, therefore as a group, health insurance costs less. In addition, group health insurance often contains special coverages that are not available or are very expensive on an individual basis. The purchasing power of the group makes this economically feasible.

 

What types of individual health insurance policies are available?

There are a variety of policies which insurance companies offer on an individual basis. Some of the more common types of policies include:

1. Major Medical - provides coverage for doctor visits, surgery and hospitalization or ongoing illnesses.

2. Hospital and Surgery - provides coverage solely related to hospital stays and surgical services, such as room and board, laboratory tests, X-rays, plus doctors’ charges

3. Hospital Confinement Indemnity - a policy designed to pay a set amount (an indemnity) for each day you are an "in-patient" at a hospital.

4. Health Maintenance Organizations (HMOs) - centralized service provider, commonly with a general practitioner (limited selection of participating doctors) coupled with coverage by specialists upon referral. Doctor visits, surgery, hospitalization and often reduced-rate prescription medicine are provided. May also cover preventive care, often not included in major medical policies.

5. Specified Disease (also called “Dread Disease”) - covers costs associated with a single disease, such as cancer, AIDS, heart attack, etc.

6. Short-Term - typically a major medical policy but with coverage lasting only for a specified length of time. Might be purchased to cover the time you are between jobs.

7. Accident Only - provides coverage for doctor visits, surgery and hospitalization resulting from an accident (no coverage for disease or illness).

8. Dental - provides coverage for costs associated with dentists and orthodontists.

9. Vision - provides coverage for sight correction

10. Home-Health Care - care provided to enable you to remain in your home while receiving services which can range from assisted living (help around the house) to around-the clock nursing with other health care providers on call.

11. Long -Term Care - coverage provided to individuals who otherwise would not be able to take care of themselves. A range of services from delivery of prepared meals, assistance with managing the residence, to stays in residential facilities. Often associated with long-term illness and the elderly.

12. Limited - Benefit - not very common, a bare-bones type of coverage intended to cover specific situations.

 

What types of group health insurance coverages are available?

Group health insurance makes individual coverages available on a group basis. A primary advantage is the purchasing power of the group that achieves reduced acquisition costs for the insurance company. The insurance company is then able to reduce the rate it charges to provide insurance for each individual member of the group. The Group is in a better position to bargain with the insurance company for additional benefits for its members. There are a variety of types of group health insurance plans, the major distinctions being the mechanism used for purchasing the insurance. Common varieties of group health insurance plans include:

1. Fully Insured Employer Group - The employer contracts directly with the insurance company to provide certificates to covered employees. Typical arrangement is either for major medical or health maintenance organization (HMO) coverages.

2. Small Employer Group - Insurance companies group certain industries together and then gather small employers together to form a larger group. These groupings enable the insurance company to better predict the cost of providing the insurance. The small employers can then get coverages otherwise not available unless charged a much higher rate. All the small employers get the same policy without deviation.

3. Large Employer Group - same as a fully insured employer group with direct contract between the insurance company and the employer to provide individual certificates to covered employees.

4. Health Maintenance Organization (HMO) - a group program under which the organization provides a full range of medical services to participants. Participants are either assigned or select from a group of general practitioners, who then refer their patients to specialists when the need arises. Good generalized system of providing medical care which is marked by curtailment in selection by the individual participant of the health care provider who render services. Individual participants insured by an HMO are called “enrollees”.

5. Self-Funded ERISA - available to large groups. The group contracts with an insurance company or third-party administrator to handle the paperwork. The group pays for all costs associated with the operation of the insurance plan itself, along with the added cost for administration.

6. Association Group - similar to a fully insured employer group, the distinction being that instead of an employer, it is a different type of group, such as a credit card company offering insurance as a benefit to its cardholders or a church group offering insurance to its parishioners.

7. Group Managed Care - a long-term health insurance plan offered through the group or association.

8. Preferred Provider Organization – another kind of health care network (doctors, hospitals, and other health care providers) that contracts with health insurance companies.

 

How can I get health coverage?

Employer-sponsored group insurance

Many people obtain their insurance through their employment. Upon reaching the eligibility requirement (such as a full-time employee working more than 40 hours per week for a six month continuous basis), the employee becomes covered under the employer's group insurance policy and the employee is issued an insurance certificate or health insurance card. Medical insurance is a very common extreme benefit of employment. Some employers will provide coverage solely for the employee, some employers pass along the cost of dependent coverage to the employee, while other employers pay the entire cost of medical insurance for the employee and his/her family.

Individual insurance

Health insurance which is purchased by the individual. Some major health insurance companies offer a broad range of coverages and options to individuals, who pay directly out-of-pocket for the cost of the insurance. Many insurance companies require completion of an exhaustive application and may require a medical examination before coverage will be offered to the individual.

Government-sponsored insurance

Some states offer health insurance benefits to their residents, often with certain income requirements for eligibility. These plans are designed for the "working poor" - individuals who are employed but no health care coverage is available where they work. This enables the state to protect its residents from catastrophic loss due to illness, disease or accident without placing an additional burden upon its program for the truly indigent.

Association-sponsored insurance

You may belong to a group or organization that offers health insurance as a benefit of membership. Check membership benefit statements, brochures, or ask organizations leaders to determine availability of health insurance through your group or organization.

 

Typical Health Care Features


What services and items might be paid for under my health insurance?

Medical expenses as the result of accident, illness, injury, and disease are typically covered by medical insurance. The particulars of how much coverage for each expense incurred is determined by the provisions of the particular health insurance policy.

Typically doctor visits, surgeon and surgery expenses, costs of hospitalization, and follow-up therapy are covered by health insurance. Some plans provide for psychiatric care, drug and alcohol rehabilitation programs, and prescription medicines.

 

What kind of exclusions and limitations might be in my health plan?

There are a variety of exclusions and limitations with respect to health insurance. Common exclusions include pre-existing conditions (subject to portability of insurance as discussed below), substance abuse, attempted suicide, mental illness, reimbursement through a Workers’ Compensation insurance program, cosmetic or elective surgery and procedures, optical and dental coverage, prescription medicine, and procedures determined to be preventive care.

Many individual health insurance policies exclude coverage for medical conditions that exist prior to the inception of the coverage. This is commonly referred to as a "pre-existing condition" exclusion. Common pre-existing condition periods are six months and 1 year prior to the inception of the insurance coverage. Other common exclusions include: psychiatric care, alcohol and drug related problems, prescription medicines, and elective or cosmetic surgery and services.

Other common limitations of coverage are listed below under Health Insurance Purchase Considerations.

 

What is the coinsurance clause in medical expense plans and how does it work?

Coinsurance, sometimes called "percentage participation," requires the insured to share in the cost of medical care. Under an 80/20 coinsurance provision, the medical expense plan pays 80 percent of eligible medical charges above any deductible. The insured is required to pay the remaining 20 percent. Other coinsurance arrangements, e.g., 70/30 or 90/10, are sometimes used. In the event of large or catastrophic medical expenses, an insured might suffer severe financial hardship due to the operation of the coinsurance clause. To compensate for this possibility, many major medical expense plans contain a coinsurance cap, or stop-loss limit. This provision places a limit on the insured's out-of-pocket costs in a given year arising from the operation of the coinsurance clause. The size of the coinsurance cap generally ranges from $2,000 to $3,000, depending on the plan, although limits as low as $1,000 are sometimes used. Once the coinsurance cap has been reached, all eligible expenses above this amount are paid in full, up to the plan's overall limit of coverage.

 

What is the difference between coinsurance and copayment?

On occasion, these terms have been used interchangeably. However, it is preferable to define the two terms differently, despite their similarity of purpose. Under a copayment or copay provision, the insured usually is required to pay a set or fixed dollar amount (e.g., $10, $20, or $30) each time a particular medical service is used. Copay provisions are frequently found in medical plans offered by health maintenance organizations (HMOs) where a nominal copayment is applied to each office visit and to each prescription that is filled.

 

I don’t want my policy. Can I give it back?

Depends on what the policy says and the type of insurance bought. Medicare supplement insurance have a 30-day period during which you can review the coverage, and if dissatisfied, cancel and have your money refunded. On the other hand, other policies have a “free look” period when you can cancel coverage. And still others do not offer this feature. Check out the front policy of the page for the “word”.

 

What if I have a medical problem or have had one in the past, How does that affect me for individual coverage?

You may:

1. Undergo a medical exam
2. Be turned down
3. Be offered coverage but your specific medical problem may be excluded with the addition of a rider
4. Offered a policy that delays coverage of your medical problem for a period of time
5. Issued a policy with full protection but charged a higher premium.

 

I am self-employed. Is there a hope to find reasonably priced coverage?

If you basically healthy, not yet eligible for Medicare, it might be thriftier to purchase a policy through a trade union or professional association. Another option is to buy a non-HMO policy that has a large deductible, a low premium, and save on out-of-pocket costs.


I’m between jobs. What are my insurance options?

As a stop-gap measure, you could invest in a short-term policy. Written for a two to six month period, they generally cover hospitalization, intensive care, surgical and doctors’ care in and out of the hospital, X-rays and lab tests. Or, if you belong to any professional organization or group, or a trade union, you may try to get a policy at a low group rate.

 

I’m vacationing outside the united states for several months. What are my insurance options?

Verify your own individual policy for such specifics. Every insurance company is different when it comes to “out of country” medical visits. You might also want to consider picking up a short-term medical evacuation policy to pay your return to the US in case of a medical emergency.

 

Insurance Coverage And Major Disease, Illness, Substance Abuse, And AIDS/HIV

People who suffer as a result of major disease or illness, such as AIDS/HIV, have special concerns with respect to health insurance coverage. People can quality for Group health insurance coverage despite disease or illness, however, exclusions for pre-existing conditions may restrict available coverage.

Some states require insurance companies that offer health insurance in that state to offer health insurance to all applicants so if you are a resident of such a state you will be able to obtain health insurance on an individual basis. Some states have state-run health insurance plans; however, the premium for such plans are is often high as a result of adverse selection (typically people who are sick and unable to obtain coverage elsewhere comprise the majority of the pool of insureds in such plans). As a final resort, people with major diseases and illness deplete their assets and resources to qualify for coverage under Medicaid.

 

What about coverage for substance abuse and mental illness?

Major medical expense plans also generally provide coverage for treatment of substance abuse (e.g., alcoholism and drug usage) and mental illness. A higher coinsurance percentage (e.g., 50 percent) and a lower lifetime benefit limit (e.g., $25,000 or $50,000) generally applies, however. In addition, the extent of coverage may depend on whether treatment is provided on an in-patient or out-patient basis.

 

What factors should I be aware of in selecting coverage?

There are several factors of importance when considering the impact of major disease or illness in the selection of health insurance coverage. Some of these factors are:
• Ability to obtain a referral to a Specialist in the field of treatment of the particular disease or illness without difficulty
• The range of allowable prescription medicines for treatment of the disease or illness
• The amount of the annual and lifetime ceiling on claims for services rendered by health care professionals, for prescription medicines and for other medical expenditures
• Whether experimental and trial medical treatments for the particular disease or illness will be covered.

 

 

 

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