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Individual Texas Health Insurance

Individual health insurance in Texas is changing rapidly. Twenty-five years ago, most people had indemnity insurance coverage. A person with indemnity insurance could go to any doctor, hospital, or other provider (which would bill for each service given), and the insurance company and the patient would each pay part of the bill.

But today, the majority of people with individual Texas health insurance are enrolled in some kind of managed care plan, an organized way of both providing services and paying for them. Different types of managed care plans work differently and include preferred provider organizations (PPOs), health maintenance organizations (HMOs), point-of-service (POS) plans, and one of the newest, most innovative plans in over 60 years: health savings accounts (HSAs).

Individual Texas Health Insurance Options

Individual Texas health insurance is usually described as either indemnity (fee-for-service) plans or managed care plans. These types of plans differ in important ways that are described below. With any health insurance plan, however, there is a basic premium, which is how much you pay, usually monthly, to buy health insurance coverage. In addition, there are often other payments you must make, which will vary by plan. In considering any plan, you should try to figure out its total cost to you based on how you use your benefits.

Indemnity Plans

With an indemnity plan (sometimes called fee-for-service), you can use any medical provider (such as a doctor and hospital). You or they send the bill to the insurance company, which pays part of it. Usually, you have a deductible to pay each year before the insurer starts paying.

Once you meet the deductible, most indemnity plans pay a percentage of what they consider the "Usual and Customary" charge for covered services. The insurer generally pays 80 percent of the Usual and Customary costs and you pay the other 20 percent, which is known as coinsurance. If the provider charges more than the Usual and Customary rates, you will have to pay both the coinsurance and the difference.

The plan will pay for charges for medical tests and prescriptions as well as from doctors and hospitals. It may not pay for some preventive care, like checkups.

Managed Care Options

A Preferred Provider Organization (PPO) is a form of managed care closest to an indemnity plan. A PPO has arrangements with doctors, hospitals, and other providers of care who have agreed to accept lower fees from the insurer for their services. As a result, your cost sharing should be lower than if you go outside the network. In addition to the PPO doctors making referrals, plan members can refer themselves to other doctors, including ones outside the plan.

If you go to a doctor within the PPO network, you will pay a copayment (a set amount you pay for certain services – say $25 for a doctor visit or $10 for a prescription). Your coinsurance will be based on lower charges for PPO members.

If you choose to go outside the network, you will have to meet the deductible and pay coinsurance based on higher charges. In addition, you may have to pay the difference between what the provider charges and what the plan will pay.

Health Savings Accounts (HSAs) are the newest, most innovative form of a managed care plan. HSAs offer members more control over their health benefits, while typically reducing premiums 25-40%. HSA plans combine a qualified high-deductible health plan with a tax-favored saving account allowing individuals to provide virtually 100% coverage for their entire medical, dental and vision needs. Most plans include preventive care options that allow additional coverage for all routine wellness visits on an annual basis.

HSAs offer the flexibility to visit any doctor you choose, but most do provide a PPO network to help maximize your out-of-pocket expenses. This gives you, the consumer, the maximum flexibility to receive the care you need, when you need it.

To learn more about how HSAs work and whether an HSA may be right for you, read "How HSAs work."

A Point-of-Service (POS) Plan is an indemnity-type option offered by HMOs. The primary care doctors in a POS plan usually make referrals to other providers in the plan. But in a POS plan, members can refer themselves outside the plan and still get some coverage. If the doctor makes a referral out of the network, the plan pays all or most of the bill. If you refer yourself to a provider outside the network and the service is covered by the plan, you will have to pay coinsurance.

It’s important to understand what kind of protection your individual Texas health insurance plan provides and what you will need to do to get the health care that you need. The more you learn, the more easily you'll be able to decide what fits your personal needs and budget.

Click here for Free Instant Quote or call now to speak with a licensed health insurance expert. Agents are available to help you Monday through Saturday from 8 am to 6 pm CST at 877-749-2241.

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