Health Plan Frequently Asked Questions

Go Ahead…Ask

 

What is a deductible?

It is a specific dollar amount that an individual must pay (or "satisfy") before reimbursement for expenses begin. The higher the deductible, the lower the cost of the health insurance plans.

 

What is co-insurance?

The co-insurance clause requires you to pay a percentage (or a fixed amount) of your covered medical expenses. The percentage is usually expressed as "80/20" co-insurance. This means after you have paid the deductible amount (if any) as stated in your policy, you will pay 20% of the medical bills and the insurance company will pay the remaining 80% of the covered medical expenses. When you total expenses reach a dollar amount stated in your policy, the insurance company pays 100% of the covered expenses up to the maximum benefit of your policy.

 

What is a HMO?

A health maintenance organization (HMO) is an organization that provides comprehensive health care to a voluntarily enrolled population at a predetermined price. Members pay a fixed fee, directly to the HMO and in return receive health care services as often as needed.

 

When does my coverage begin?

All Texas health insurance plans are subject to underwriting approval. Do not cancel any current Texas health insurance policies until issued an effective date.

 

What is a waiver?

A term used when a particular area of the insured is not covered due to previous history. Some are temporary and some are permanent.

 

What is exclusion?

This states the types of injuries or illnesses that are not covered. All policies have exclusions. The most common types of exclusions are pre-existing conditions, self-inflicted injuries, and injuries incurred while committing a criminal act. Injuries resulting from some specific activities may also be excluded.

 

What are "out-of-pocket" costs?

An insured's "out-of-pocket" costs under major medical expense plans include the deductible, cost-sharing amounts arising from the operation of the coinsurance clause, and medical expenditures that are deemed by the plan to be in excess of "reasonable and customary" charges. Only charges that are "reasonable and customary" for a specific type of service, in a particular location or geographic area, are eligible for reimbursement under medical expense plans. The definition of "reasonable and customary" may vary somewhat from one medical expense plan to another.

 

What is a “Co-payment”?

Under a co-payment or co-pay provision, the insured usually is required to pay a set or fixed dollar amount (e.g., $3, $5, or $10) each time a particular medical service is used. Co-pay provisions are frequently found in medical plans offered by health maintenance organizations (HMOs) where a nominal co-payment is applied to each office visit and to each prescription that is filled.