What is health insurance?
Health insurance helps pay for services covered by your plan, like doctor’s fees, hospital bills, tests, and medicine.
4 Ways to Pay
Health insurance pays for some of your costs and you pay for other costs out-of-pocket. Here’s how.
A premium is what you pay each month for health insurance.
*️⃣ This amount is based on your age, where you live, and if you use tobacco.
A deductible is what you must pay every year before your health plan will pay for medical bills or other services covered by your plan. The deductible may not apply to certain services like routine doctor visits. Deductible amounts can range from very low to very high.
A copayment or copay is the fixed amount you must pay for a service covered by your plan. For example, your health plan may require you to pay $25 to see your primary care physician (PCP).
*️⃣ Plans usually don’t count copays toward your deductible.
Coinsurance is the percentage of the cost of a service that you have to pay. For example, your health plan may require you to pay 20% of the cost of a service and it will pay the other 80%.
*️⃣ Exclusive Provider Organizations (EPOs) and Health Maintenance Organizations (HMOs) will usually require you to pay 100% of your out-of-network expenses.
Where do I get health insurance?
Your coverage is affected by who you get your insurance from, such as your job or group, yourself, or government programs. Most Texans are covered through their job in “self-funded” plans.
Your Job or Group
Most people get insurance through their job or as a member of some type of group. This “group coverage” is regulated differently depending on the size of the business or group and whether it is self-funded.
Large Businesses. Businesses with more than 50 employees provide large-employer plans. Some are regulated by the federal government and some are regulated by the Texas Department of Insurance (TDI).
- Self-Funded Plans. If the business pays for the health care costs themselves instead of buying coverage from an insurance company, it is a self-funded plan. These “ERISA” plans are regulated under the Employee Retirement Income Security Act of 1974. Self-funded plans are regulated by the U.S. Department of Labor.
- Not Self-Funded Plans. If the plan is not self-funded then it is regulated by TDI.
Small Businesses. Small businesses offer health insurance to their employees through small group coverage. Small businesses do not have to offer health insurance to employees and do not have to cover part-time employees. These plans are usually not self-funded so they are regulated by TDI.
Individual Coverage. If you buy health insurance for yourself then you are in the “individual” market. You can buy this kind of plan from an insurance company, agent, broker, or through the federal health insurance marketplace. This kind of plan is regulated by TDI.
Medicare. If you are over 65 or have a disability you may be able to get health coverage through Medicare. This is a federal health program through the Centers for Medicare and Medicaid Services (CMS) in the U.S. Department of Health and Human Services (HHS).
Medicaid. If you or your family can’t afford insurance or you have a disability then you may be able to get Medicaid. This is a federal and state program through CMS and Texas Health and Human Services. Families that can’t afford insurance for their children may be able to enroll them in Children’s Medicaid or CHIP.
Service members and Veterans. Military service members and their families may be able to get coverage through TRICARE. This is a federal health program run through the U.S. Department of Defense. Veterans can get health care directly through the Veterans Health Administration’s (VA) integrated health care system.
What kinds of health plans are available?
Health Maintenance Organizations (HMOs)
HMOs provide health care services through networks of doctors, hospitals, and other health care providers.
- An HMO will pay for most of your care, but you pay copays for doctor visits, medicine, emergency visits, and hospital stays.
- HMOs usually don’t pay if you go to a doctor or hospital that is not in their network.
- You have to choose a PCP and get a referral from that doctor before you can make an appointment with other doctors in the network.
- You will not have to pay a deductible or coinsurance.
- A doctor or hospital in your network cannot bill you for any balance after the copay is met.
Preferred Provider Organizations (PPOs)
PPOs allow you to get health care services through “in-network” or “out-of-network” doctors and hospitals and other health care providers.
- PPOs will usually pay more of the bill if you use in-network doctors and hospitals.
- When you use the PPO network, you usually pay a copay for services covered by your plan.
- You may also have to pay for part of the total cost (coinsurance).
- When you use an out-of-network doctor or hospital, you will usually pay a deductible and more of the bill.
Exclusive Provider Plans (EPOs)
EPOs are like HMOs because they will only pay for services provided by in-network doctors and hospitals. But they are also like PPOs because you don’t always need a referral from a PCP to see a specialist.
- You may pay copays or coinsurance for services covered by the EPO when you are in-network.
- Many EPO plans require you to meet a deductible before paying for services.
- EPOs usually don’t pay if you go to a doctor or hospital that is not in the network.
A Health Maintenance Organization with POS is a combination of an HMO and a PPO.
- Usually, you have to choose a PCP and get a referral from that doctor before you can make an appointment with other doctors in the network.
- A POS plan will usually pay for more of the bill if you use in-network doctors and hospitals.
- When you use the network, you have to pay copays.
- When you use an out-of-network doctor or hospital, you will pay a deductible and part of the bill.
Health Plan Documents
Do you need to know what your plan covers or want to shop and compare plans? These documents will help you understand what a policy covers, predict your costs, find doctors and other providers, and learn about your plan’s network.
The policy, or evidence of coverage (EOC) if you have an HMO, outlines your rights and responsibilities under the plan. The policy or EOC will have the most detailed info about your plan. You will also get documents that outline of your benefits and coverage.
A provider directory is a list that tells you which doctors, hospitals, and other
*️⃣ Directories must be available online and be up to date. You also have the right to ask for a paper copy of the directory.
You can use the directory to:
- Find hospitals that are part of your health plan’s network.
- Find out whether certain specialists are working at a hospital that is part of your health plan’s network. (Specialists include radiologists, anesthesiologists, pathologists, emergency physicians, neonatologists, and assistant surgeons)
- Find health plans offered by your insurance company that provide coverage for services from a specific hospital or hospital-based physician group.
A drug formulary is a list that tells you the generic, brand name, and specialty prescription drugs covered by the plan and how much they will pay for each. Use the formulary to make sure the plan will cover the drugs you need.
*️⃣ You can check the formulary before you buy a plan. The formulary will also be with the policy or EOC after you buy a plan. Some plans also make the formulary available on their website.
Terms to Know
Coverage/Benefits – The health care services that the health plan will pay for if you get hurt or sick. Coverage and benefits can include preventive care.
In-network – Health care services provided by a doctor or hospital that has an agreement with your health plan. You will usually pay less for in-network services.
Out-of-network – Health care services provided by a doctor or hospital that does not have an agreement with your health plan.
Policy – A contract between you and the insurance company. The policy tells you what’s covered and what the insurance company is required to pay.
Policy period – the period of time your policy provides coverage.
Primary care physician (PCP) – Your personal doctor that provides basic health care services and coordinates your care by referring you to specialists.
Self-funded plans – Health plans operated by an employer (instead of the employer buying a health insurance plan). Self-funded plans are overseen by the U.S. Department of Labor.