Shopping for health insurance alternatives? Choose wisely

November 25, 2019

The Texas Department of Insurance (TDI) has a message for consumers shopping for health coverage during open enrollment – don’t assume all plans provide traditional, major medical coverage.

“There are lots of options to fit different needs and budgets, but make sure you know exactly what you’re buying,” said Insurance Commissioner Kent Sullivan. “The more questions you ask before you buy a plan, the better.”

TDI has posted a health plan shopping guide at www.tdi.texas.gov to help people know what questions to ask when deciding on a plan. Key questions include:

·         How much will your out-of-pocket costs be for care? How much do you have to pay before the plan starts paying (the deductible)? Can doctors and other providers bill you for the difference between what they charge and what the plan pays?

·         Does the plan cover preexisting health conditions? If it doesn’t, it may deny a claim if it determines you had a related condition in the past.

·         Does the plan cover emergency care, mental health services, and prescriptions? What does it not cover?

·         Who regulates the plan? Who would you complain to if you have a problem?

Some of the most common alternatives to traditional insurance include:

Short-term plans: These plans last 12 months or less and may be renewed for up to three years. Premiums are often lower than major medical policies, but they usually have fewer benefits. These plans are also called short-term, limited-duration insurance plans.

Health care sharing ministries: Members generally share a religious belief and agree to make monthly payments to cover the medical expenses of other members. They aren’t regulated by the state, however, so there is no guarantee they will pay claims. These plans also may not cover preexisting conditions or provide as many benefits as major medical plans. Make sure to check consumer reviews and verify that the plan has a record of paying claims and providing good service.

Discount plans: These plans offer discounts on health care for a monthly fee. They are not health insurance policies. Be especially cautious about scams involving these plans. The Federal Trade Commission warns, “While there are medical discount plans that provide legitimate discounts, others take people’s money and offer very little in return.”

Fixed indemnity plans: These plans pay a set amount on a per-period or per-incident basis, regardless of how much the medical care cost. For example, the plan might pay $100 per day if you are hospitalized, and you would be responsible for the rest of the cost. These plans also may not cover preexisting conditions or provide as many benefits as a major medical plan.

Association health plans: This is a plan set up by employers to provide their employees with health coverage. These plans are exempt from some state and federal requirements and may not cover as many services as a major medical plan.

For more information, contact: MediaRelations@tdi.texas.gov

https://www.tdi.texas.gov/news/2019/tdi11252019.html