Texas health insurance plans offer protection against sudden and unexpected costs for illnesses and injuries. According to the U.S. Census Bureau, only 3 out of every 4 Texans have some form of health insurance. A Harvard Medical School study found that in 2001, out-of-pocket costs averaged nearly $12,000 per American, and although 75% had health insurance at the time of the injury or illness, 750,000 people filed for bankruptcy due to medical costs. The most affordable health insurance in the individual and group market is managed care plans like PPO’s. Most employers don’t even offer Fee-For-Service type plans and this holds true in the individual market as only a few carriers have plans that don’t require usage of a provider network.
Under a fee-for service or indemnity plan, a policy holder can go to any provider he wants and does not need a referral in order to consult a specialist. Providers bill the insurance company directly and under Texas law, insurers must pay the claim promptly. Fee-for-service plans include premiums for participation in the plan, deductibles or the amount the policy holder pays up front before coverage kicks in, and co-insurance rates, more commonly known as co-pays. Texas health insurance plans must pay at least 50% of the cost of all covered services once the deductible of a fee-for-service plan has been met.
A managed care health plan has a network of preferred providers under contract, including doctors, clinics and hospitals. Typically, Texas health insurance plans with managed care offer financial incentives for members to use in-network providers by offering lower co-pays. In most managed-care plans, members can seek care from any doctor or clinic or other provider they wish, but will pay more out of pocket for out-of-network providers. In-network providers are covered at a higher rate. Most managed-care networks also have a list of covered prescriptions, called a formulary. Coverage is limited to services and treatments the managed-care plan deems medically necessary.
Managed-care plans include HMOs, PPOs and POS. In an HMO, a member has a Primary Care Physician and cannot see a specialist without a referral from the PCP. Texas health insurance plans called Preferred Provider Organizations are more flexible than HMOs as there is no PCP and no referrals are needed. Point-of-Service plans are a combination of the two. Members will have a PCP but are not required to get a referral to see a specialist. Managed-care plans typically have lower premiums and lower deductibles than fee-for-service plans, but have more limitations on covered expenses and providers, especially with an HMO.
The monthly cost of a PPO plan will be substantially less than a Fee-For-Service plan due to the contracts the insurance companies have with the providers and doctors. These contracts better allow the insurance companies to better regulate cost and in turn lower premiums can be passed onto the consumer.
