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Understanding Health Insurance For Texans Easier Than One Might Think

Oct 10, 2007
For some people, mention the words "health insurance" and the eyes begin to glaze over.

If you're living in Texas, the state with the largest percentage of residents (25%) without health insurance coverage, it's probably the same. For those living in Dallas, Houston or Austin, which traditionally have some of the highest numbers, the confusion may have at least something to do with the complexity of health insurance.If that's the case, perhaps a review of the basics will help.

With medical expenses rising and no relief in sight, it's a near certainty that at least some people without insurance coverage will find themselves needing it, the alternative being paying for the service when they can least afford it.

So what's all about? Health insurance plans are categorized into one of three types: so-called indemnity plans (otherwise known as reimbursement plans), preferred provider plans (PPOs), and managed care plans (HMOs).

The indemnity plan typically gives consumers the most choice: you pick your doctor, the bill gets sent into the insurance company and you're reimbursed for all or part of the cost, depending on the amount the insurance company has worked out with doctors and those who sign up for the plan.

Providers may offer a PPO as a means of offering lower costs, done so by arranging with a specific group of health care providers. The consumer may get a broader range of coverage and the company is able to negotiate a better rate because it is bringing more business to the doctors and hospitals involved in the PPO.

With the HMO managed care plan type of health insurance, the insurance company is even more involved in the process, in some cases directing the doctors to coordinate the care they provide, referring the patients they see to specialists that only work for the HMO network.

Again, lower costs is the objective. Coverage provided in a health insurance plan vary greatly, so wise consumers should carefully review the details before making a decision.

What's right for you? Only you can decide, but experts suggest taking a good look at the amount of coverage being provided, the type of coverage and making sure that the costs and coverage provided align with what
you need as a consumer.

Variety of coverage is often one of the best ways to evaluate a particular plan, with a good plan offering several types of coverage. Having a hospital expense portion of a health insurance plan would involve the provider paying room and board as well as incidental services costs. If someone needed surgery, the fees to the surgeon and other related costs would be covered. For physicians' expense, a policy might pay for visits to a doctor's office or when a physician makes a hospital visit.

In the case of major medical, a patient is typically provided with broad coverage but with a high deductible, which might be good for someone concerned with paying the cost of a serious illness or injury.

When considering your options, Texans should also consider coverage for such items as prescription drugs, preventive care, and vision care.

For many people, cost is still an issue, so consider the out of pocket expenses that may be in addition to any monthly premiums. Frequent visits to a family doctor may result in higher costs than otherwise expected.

To prepare, consumers should ask what payments they'll be asked to make, including any co-payments required, defined as the amount they will be asked to pay for each visit to a doctor or other health care provider.
Other costs to consider include any deductibles (the amount you will have to pay before the insurance company contributes to the cost) and coinsurance (the percentage of your medical costs paid after reaching the deductible amount).

Once a consumer decides "what" to buy, getting the coverage is the next step. Perhaps you have access to a group health insurance plan, either at work or through an association that offers the options. Even those who aren't in that category have choices, typically through the purchase of an individual health insurance plan that allows you to customize the options to fit your circumstances.
About the Author
Pat Carpenter writes for Precedent Insurance Company. Precedent puts a new spin on health insurance. Learn more at Precedent.com
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