Be sure you understand the full extent of the coverage that is included in any health plan you’re considering.
If you have more than one option, choose the plan with the highest level of coverage you can afford. The higher a plan’s deductibles, copays, and coinsurance, the more you can usually save on premiums. However, you’ll also have to pay more out of pocket for claims.
Consider factors other than cost. A carrier’s financial rating and history of consumer complaints are other important considerations. Also make sure your carrier is licensed by TDI. Guaranty associations play the claims of licensed carriers that become insolvent. If your company isn’t licensed, your claims could go unpaid. You can learn a company’s financial rating from an independent rating organization, its complaints history, and its license status by calling TDI’s Consumer Help Line or by viewing company profiles on our website
1-800-252-3439
463-6515 in Austin
www.tdi.state.tx.us
Ask your friends, family, and physician for recommendations. Be sure you learn the answers to these questions about any health plan you’re considering:
- Does the plan cover your choice of physicians and hospitals?
- Are there limits on medicines, referrals to specialists, or the types of treatment or surgery available?
- Are there benefit limits per person, family, illness, treatment and/or hospital stay?
- What is the procedure for out-of-network emergency care?
- Does the plan have yearly or lifetime maximums?
Additional precautions
When you apply for coverage, be sure you fill out the application accurately and completely. If you knowingly provide incorrect, incomplete, or misleading information, especially about a pre-existing condition, your coverage could be canceled or your benefits denied.
When purchasing an individual plan, never sign a blank policy application, and verify any information filled in by an agent. Make payments by check or money order payable directly to the insurance company or HMO, not the agent, and insist on a signed receipt on the carrier’s letterhead. Make sure you have the full name, address, and phone number for both your agent and your carrier.
Never pay more than two month’s premiums until you have received a copy of your policy, HMO certificate, or group membership certificate.
State law requires that you have a 10-day “free-look” to evaluate any individual coverage policy, during which you can change your mind and receive a refund. If you return a policy, send it by certified mail, return receipt requested.
Health Plan Rates
Texas, like most states, has no authority to regulate or approve health plan rates. The only exception is for small-employer plans, where the state has a cap on annual premium rate increases. Insurance companies and HMOs set their own premiums. Small-employer and large-employer plans are required to give 60 days notice before any increase takes effect.
In general, health plan rates are determined by
- The coverages included. The more conditions your plan covers, the greater the carrier’s risk. Premium rates increase accordingly.
- Amount of the deductibles. Plans with higher deductibles have lower premiums.
- Number of covered dependents. Adding a spouse or dependent children to your plan will raise your premiums.
- Number of group plan participants. Group plans are usually less expensive than individual plans. As group size increases, administrative costs per plan member decline. Also, smaller groups and individuals tend to buy health coverage based on participants’ targeted needs, increasing the likelihood of claims. This type of “custom tailoring” is less likely as claims risk is distributed across a larger population.
- Claims experience. You can expect to pay more if you’ve filed claims in the past.
- Age. Older people can reasonably be expected to require more, and more expensive, health care. Your premium will reflect your age, or the ages of the members in your group plan.
- Gender. Females generally incur higher medical costs than males at younger ages, particularly during childbearing years. This variance diminishes with age until medical costs for males begin to exceed those for females in the late 50s and early 60s. Younger, proportionately more female plan members, or older, proportionately more male, will increase rates.
- Geography. Health costs vary by region due to differences in cost of living, medical practices, and the amount of medical competition in the area.
- Industry. If you are in an employer-sponsored plan, your rates may be affected by the nature of your profession. Some industries have higher medical claims costs than others because of working conditions and the prevalence of accidents. High employee turnover in some industries can also result in higher administrative costs for the carrier.
Handling rate increases
Premiums tend to rise quicker for individual plans since there is no employer or other plan sponsor to help bear the cost. If your premiums are increasing beyond your ability to pay, you may be able to save money by asking your carrier to revise an individual plan.
Options to reduce your individual plan’s premiums may include raising your deductibles or copays, increasing your maximum out-of-pocket payment, or changing your coverage.
Be sure that you don’t drop an essential coverage, however. Before making any changes to your plan, find out if your carrier will allow you to add back any dropped benefits later.
If you’re unable to reach a good deal on your current plan, you may want to switch to a new plan or carrier entirely. Remember, if you have, or recently had, a medical condition, you may encounter problems finding new coverage. If you have a serious health condition and cannot find coverage, you may have to join the Texas Health Insurance Risk Pool or seek coverage through government programs.
Important! Always try to keep your current coverage until new coverage takes effect. Most companies do not begin coverage until they approve your application and deliver your policy. Gaps in coverage leave you vulnerable in the case of emergency sickness or injury and can result in longer waiting periods before pre-existing conditions are covered by a new plan.
If you are concerned about the size of certain physician fees and hospital charges check with your plan to see if the provider’s estimate of how much the treatment will cost is within the “usual and customary” range, keep a record of whom you talk to and when, and get a second opinion if surgery is involved.
Also, don’t be afraid to challenge a physician or provider about the costs of tests or services:
- Request an itemized bill and review it. Question billings you do not understand. If the explanation doesn’t make sense, check with your plan.
- Check whether your physician or provider included the proper treatment or procedure code. An improper code may result in the wrong amount being listed.
- Tell your insurance company or health benefit plan administrator if you think certain charges are incorrect or you were charged for a service never received.
Check your county medical association. Grievance committees at the county level accept complaints against physicians or providers and work as go-betweens in fee disputes.
