Texas Health Insurance can be Affordable

What is Health Insurance?

Health insurance is a system that allows policy holders and insurance companies to spread the risks associated with injury and illness in order to limit the financial hardship they create. Insurance companies guarantee to pay a specified portion of their policy holder's medical bills as they occur. In order to obtain this guarantee, a policy holder is expected to make a monthly payment to the insurance company. The insurance company combines the payments made by each of the policy holders and forms a pool of funds that they draw from in order to cover their portion of the policy holder's medical expenses. Generally, only a small percentage of policy holders will utilize the insurance, which means that the insurance companies will have more in the pool than they will need to spend. The unused funds within the pool are then used to create a reserve that can be tapped to pay for future expenses.

The state of Texas has many resources available for Texans who do not qualify for health insurance for health or affordability reasons. They also make coverage available to those who were displaced as a result of Hurricane Ike.

The Importance of Health Insurance to Texas Residents

It's impossible to factor in every minor health insurance event your family will encounter each year. Medical visits and procedures are not always planned in advance and patients rarely know the costs of a procedure before it's done. This is where health insurance plays its most vital role. With health insurance, you simply add your insurance premium into your budget and set slightly more aside for copayments.

Not only are health insurance costs more predictable than paying out of pocket for care, but they are also more affordable. As an example, consider an insurance policy with a premium of $50 per month. After 6 months of coverage, a policy holder will have paid $300 for premiums. If the policyholder hasn't visited a physician during this time, there has been no other out of pocket expense. Should something happen after the sixth premium, a minor accident or illness, the policyholder is able to visit a physician, emergency room or walk-in clinic for treatment. After presenting their insurance card they will be asked to make a small copayment (generally $25-$50) and that completes the policyholder's monetary responsibility. After a few months the policyholder will receive a statement in the mail from the clinic. This statement will outline the treatment given, the total cost for the treatment and will subtract their $50 payment from the total. If the cost of treatment was $2,500, the policyholder has paid a total of $300 in insurance premiums and a $50 co-pay. This makes the policyholder's expenses for a $2,500 bill total only $350.

Terminology for Texas Health Insurance

When shopping for health insurance, it's important to be familiar with the terminology used. Becoming familiar with popular health insurance terms will help you to decide what type of health insurance policy and options you want to have.

COBRA: Is a program that allows for the continuation of health insurance coverage after you terminate employment with your group plan provider. COBRA allows you to keep your existing coverage for up to 18 months or until you sign up for coverage under a new plan.

Co-pay: A co-pay is a fixed amount that policyholders are obligated to pay for medical treatment or medications. The co-pay is generally due at the time of treatment and represents a small fraction of the entire bill.

Deductible: A deductible is a base amount that a policy holder must pay for medical treatment before their policy kicks in. Not all policies have deductibles. If your policy has a deductible, you will pay all medical expenses out of pocket until your deductible has been satisfied and then you will pay only co-pays.

Health Savings Account (HSA): Health Savings accounts are accounts that hold funds to pay for out of pocket medical expenses including co-pays and deductibles. The money deposited into an HSA is tax deductible and may need to be used within 12 months of deposit. Funds in an HSA can be used for various expenses including acupuncture, massage therapy, and travel expenses related to an illness. Check with the company providing the HSA to find out what the allowable expenses are.

Lapse: A lapse signifies the termination of a policy due to nonpayment of premium.

Limits: A limit is the maximum amount of expenses your policy will pay for your medical needs per year. This number is usually in the millions and is not reached by most policy holders.

Preexisting Conditions: When a policy holder has an illness or chronic injury that was diagnosed before he or she took out their policy, it is considered a preexisting condition. Some insurance policies will not pay for any expenses related to that preexisting condition for a specified time period (usually one year).

Premium: A premium is the amount of money a policy holder must pay in order to keep a policy from lapsing.

Identifying Options for Texas Health Insurance Coverage

It can be overwhelming when you begin to understand the many options available for health insurance. If you aren't concerned about day to day care, and instead want coverage focused exclusively on major catastrophes, you should consider major medical insurance. With major medical insurance, Texas residents have an inexpensive option to help them through a catastrophic health event. Major medical is more affordable because the insurance company will only be responsible for paying portions of expenses accrued during emergency or catastrophic illness and not for preventative care expenses.

Companies with three or more employees sometimes offer group health insurance coverage to their employees. Under the terms of this arrangement, the employer pays part of the health insurance premium to reduce costs for employees. Another benefit of group health insurance coverage is that it is not underwritten using your individual health as a factor. Instead, the policy is underwritten based on the experience of similar groups. This is particularly beneficial for people who have preexisting conditions. Should you decide to leave your employer, you may be eligible for COBRA coverage up to 18 months after you leave.

Another type of policy that is beneficial to Texas residents is individual insurance. Individual insurance can be affordable, portable and accessible to healthy individuals. Individual insurance is underwritten based on your health history, so the healthier you are the more affordable it is. With individual health insurance, you can configure benefits, deductibles and copayments to reach an affordable premium for you.

Texas residents who are unable to get approved for individual health insurance due to preexisting conditions are in luck, because the state of Texas has developed a program called a "risk pool" to insure the uninsurable. The Texas Health Insurance Risk Pool is subsidized and offers an affordable premium and coverage to Texas residents who have been denied coverage. There are different deductibles to choose from, beginning at $500.

In order to assist low income women, the state of Texas has developed the Women's Health Program. The Women's Health Program gives gynecological support, health screenings and birth control to low income women. The program is paid for by Medicaid.

Low income mothers and parents in Texas have not been forgotten. With their CHIP Perinatal Coverage, the state of Texas provides prenatal care to women who don't qualify for Medicaid. The Nurse-Family Partnership is a subsidized program offered by the state of Texas to first time parents of children under two. This program provides nurses to visit the homes of first-time parents during pregnancy. The visits can continue until the child turns two.

Individual and Group Coverage Health Insurance Options in Texas

If you've decided to get an individual or group health insurance policy, you'll need to decide what type of physician's network to use. There are two types available- PPO plans and HMO plans.

PPO's are also referred to as Preferred Provider Organizations. PPO plans are comprised of a network of physicians who have agreed to work under contract with your health insurance company. With a PPO, you receive full benefits when working with physicians within this network. For a reduced benefit amount, you can choose to work with physicians and hospitals outside the network.

Health Maintenance Organizations (HMO's) are more restrictive than PPO's. HMO's offer no insurance coverage should you work with a physician or hospital outside the insurance company's network of participating physicians.

Choosing the Right Health Insurance Coverage for Texas Residents

The sheer amount options available to Texas residents looking for health insurance coverage can be intimidating. The pressure of making sure you've made the right choice, considered all the important factors and gotten the best value for your money is downright stressful. With all the state subsidized and private insurance plans available to Texas residents, it is understandable if you feel overwhelmed. The following tips will make your choice much easier.

Consider the limitations imposed by your health history first. If your health is poor or you have preexisting conditions that make you uninsurable, the Texas Health Insurance Risk Pool may be your only option for getting coverage. You will need to provide proof that you've been turned down for coverage before applying. Another option for those who are uninsurable or have expensive preexisting conditions is group coverage. You can get group coverage through unions, employers and some fraternal organizations. Expectant mothers should remember that a pregnancy is considered a preexisting condition and can make individual coverage too expensive. For them, Texas' CHIP Perinatal Coverage or Nurse-Family Partnership programs could be worth looking into.

Age plays an important role in your choice of a health insurance plan. Medicare takes a lot of question out of finding coverage, if you're old enough to qualify. If you do qualify for Medicare, you'll need Medigap coverage. Medigap coverage will bridge any gaps in Medicare coverage. Medigap can help you pay for deductibles, co-pays, alternative healing, and other expenses not covered by Medicare.

The third consideration involves dependents. If covering dependents outside of a group plan, find out if it will be more cost effective to cover them on their own individual policy.

Your policy's deductible will have a big impact on the affordability of your policy. Policies with higher deductibles are generally less expensive, but they will have more out of pocket expenses. If you think you won't need to use your insurance that often, then it could be worthwhile to set high deductibles. In order to offset the higher out of pocket expense, you can open an HSA funded with pretax dollars. These contributions can cover your deductibles while giving you a tax savings advantage.

The final consideration when choosing a health insurance plan in Texas is deciding how often to pay your premium. Premiums can be paid annually, semi-annually, quarterly or monthly. It is generally best to pay your policy annually. The more payments you make in a year, the more opportunity for your policy to lapse. Once a policy has lapsed, your health will have to be reassessed before the insurance company will reinstate the coverage. Any illness or chronic injury that has occurred since you took the policy out will not be considered a liability and could have a detrimental affect on your ability to get the policy reinstated. Your insurance company may also have an electronic billing option, allowing you further safeguard against lapsing.

The Leading Health Insurance Plans in Texas

Texas residents have access to a vast network of specialized insurance services. In addition to the subsidized, state sponsored programs and independent insurance companies that operate nationally, Texans can get individualized plans from:

Unicare of Texas: Unicare has designed several plans specifically for Texas residents. Their newest plan, Sound, offers affordable care and instant underwriting to 19-29 year olds. Individual Fit is another plan they offer for individuals and families. Individual Fit has low deductibles and co-payments. Unicare Texas has offices in Houston and Plano.

Blue Cross Blue Shield of Texas: Through their interactive website, Texas residents can get instant rate quotes and PPO network comparisons. They have regional offices in Austin, Corpus Christi, Dallas, El Paso, San Antonio and Waco.

UnitedHealthcare of Texas: Texas residents can choose between HMO and PPO coverage. The also offer an HSA. There are UnitedHealthcare insurance agents statewide as well as in or near Arlington, Fort Worth and Garland.

Conclusion: Protect Yourself with Texas Health Insurance

When considering the health of your family and you budget, health insurance is a tool that can't be ignored. Opting not to have health insurance coverage could result in devastating losses of money and possessions. An unexpected injury or illness treated with out of pocket funds could have long lasting consequences that negatively affect your future. Don't compromise the health of you or your loved ones. The state of Texas has worked diligently to create several affordable programs with subsidized premiums that can help the low-income and uninsured. With all of these options available, your family could be covered by an affordable health insurance plan in no time.