Texans who buy their own health insurance

December 10, 2011


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Texans who buy their own health insurance could be due an estimated $481 million in refunds over the next three years, thanks to the Affordable Care Act (ACA), the much-maligned national health reform law. Unfortunately, some Texas officials are trying to deny consumers the money they are owed – and hand most of it right back to the insurance companies.

At issue is a pro-consumer provision in the ACA designed to keep insurance companies from gouging policyholders. This rule – known as the medical loss ratio (MLR) – makes sure insurance companies don’t spend more than 20 percent of customers’ premiums on non-health care items like marketing, CEO salaries, paperwork and profits. Spend any more, and the company must cut consumers rebate checks.

This rule gives insurers ample room to turn a profit while providing an incentive for them to keep unnecessary costs down. But under the state’s proposal to phase in the rule, consumer refunds would be cut by more than half, a loss of more than $200 million for consumers over the next three years.

The Texas Department of Insurance (TDI) argued that unless the MLR requirement is weakened, some insurers will withdraw from Texas, leaving residents with fewer choices. Yet the state’s fear is overstated. Texas has more than 30 insurers offering plans to consumers who buy their own coverage. That contrasts sharply with Maine, for example, which was granted an adjustment because one of just three insurers serving its individual market threatened to pull out if the requirement went into full effect in 2011.

In Texas, insurers representing more than 90 percent of the market have stated they do not intend to exit if required to increase value in their health plans.

Texas residents need strong market competition to keep health insurance costs down and service up. And the new MLR requirement provides a level playing field for that competition. But consumers don’t need an infinite number of health insurance choices if they are of poor value.

Texans work hard and deserve a fair value for their health-insurance dollar. And they deserve state insurance officials who balance their interests along with those of local insurance companies. At a time when families are tightening their belts, insurance companies should be required to do the same.

Federal officials are currently reviewing the state’s proposal and should reject Texas’ attempt to maintain business-as-usual for low-value health insurers.

Catastrophic Health Insurance Texas 

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5 Responses to Texans who buy their own health insurance

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  3. Jimeson on April 12, 2012 at 12:03 am

    Individual health insurance is the hardest kind to buy, because you can’t rely on the expertise of an employer, union, or association to screen out bad plans. And without an employer to pick up at least part of the cost, it’s also usually the most expensive. Until the health-care reforms are fully in place in 2014, you can be turned down or charged more for an individual policy in most states if you have a pre-existing condition. Here’s what you should know about buying insurance on your own:
    Consider alternatives

    The options below can be cheaper, more comprehensive, or both compared with an individual health plan, and are available to people with pre-existing conditions. But not everyone is eligible.

    A group plan through the job of a spouse, domestic partner, or parent. If a family member has a job that offers dependent coverage, you can join it at any time if you have lost other coverage. And adults 25 and younger can now stay (or go back) on their parents’ insurance thanks to health-care reform. (The exceptions are retiree-only plans and Medicare.)
    Public insurance options. They include Medicare, Medicaid, and the Children’s Health Insurance Program (CHIP). Check at HealthCare.gov for income and other eligibility requirements.
    COBRA. It’s a federal program that lets you continue your employer-based coverage for 18 months (and sometimes longer) if you lose or leave your job. You’ll have to pay the full premium, including the part your employer used to pay, but that might be cheaper than buying your own especially if you have a pre-existing condition.
    Other special options for people who have quit or lost a job . They include being allowed to convert a group plan to an individual one.

    Understand what you need

    Good insurance not only helps with your current medical needs but also protects you against ruinous future expenses for accidents or illnesses. That’s why you should get a comprehensive policy that covers doctors, outpatient treatments like chemotherapy, diagnostic and screening tests and procedures, prescription drugs, hospital care, rehabilitation, and mental-health care. Learn more about what to look for in a plan.
    Make sure you buy real insurance

    Beware of sales pitches from agents, telemarketers, e-mail, faxes, roadside signs, door-to-door salesmen, or websites that seem to promise too much, offer “discount” insurance, emphasize very low premiums and “big savings” even if you’re in poor health, or tell you that you have to buy health insurance because of the new reform law. You risk ending up with junk insurance that could leave you broke if you ever get sick. Read more about how to choose a good plan.
    Scope out the market

    Start by checking out our rankings of health-insurance plans. You can also go to HealthCare.gov, the federal government’s insurance information portal, which lists some 11,500 health-insurance plans. You can look them up by ZIP code and sort them by key details such as deductibles, co-payments, co-insurance, and out-of-pocket limits.

    You’ll also find links to a plan’s provider networks and drug formulary. And you can see the “preferred” (best) premium for each plan for a person of your age and gender, as well as the percentage of applicants who are refused coverage or charged extra because of pre-existing conditions.
    Apply to multiple plans for coverage

    If you have any concern about pre-existing conditions, apply for multiple policies simultaneously from several companies. Companies might treat the same conditions differently depending on their underwriting guidelines and other factors.

    Be aware that certain serious illnesses, such as diabetes, schizophrenia, and multiple sclerosis, will get you automatically turned down in most states. If you do get turned down for a pre-existing condition, here are some options.

    Most carriers will accept applications directly online or over the phone. But also consider working through an independent licensed broker who represents several of the companies you’re interested in. (Avoid “captive” agents who sell only one company’s insurance.) An experienced broker can help you understand the trade-off between, say, higher deductibles and lower premiums. And if you have a pre-existing condition, a broker can also request what’s called a “pre-screen” from each carrier, which is an assessment of whether the carrier might insure you, and at what estimated cost, based on your health history. This can be done without disclosing your identity, and it’s something you can’t do on your own.

  4. Arnel on April 23, 2012 at 3:47 pm

    99% of insurance companies will need to run your credit to give you a quote. It’s a soft hit and will have no effect on your credit score. The best way to get quotes is to contact a local independent agent. They can run quotes (for free!) with many different companies to give you the best price.

  5. Patricia on April 25, 2012 at 3:12 am

    Hi, If you call them directly all they slhuod need to know is what state you are in. A lot about your rate is dependent on the individual state policies and regulations. That is what they need to give you a quote as far as I know and I assume the rest of the info is indeed so they can send you junk mail etc (could be wrong though). Check out the company I listed below. They have by far the best rates I have ever heard of and If you call can give you a quote in about 5 minutes. Good luck,