Texas Health Topics

A “covered” service is one that is listed in the contract between the doctor or hospital and the insurance company. The contract specifies the agreed upon charge for each service covered by the contract. If the service is not listed on the contract, the doctor or hospital is free to charge any amount they wish. Being covered limits the amount that can be charged for a service.

For example, during an office visit, the doctor orders a chest X-ray. The clinic sends a bill for $127 for the chest X-ray. Because X-rays are a “covered” service, you are obligated to pay only the negotiated rate of $13. You are not responsible for the $114 difference.

Health insurance companies distinguish between (1) routing physical, (2) annual mammogram, (3) Pap test, and (4) PSA screening. In Texas, an annual mammogram, Pap smear, and PSA screening may be considered “covered services”, while an annual routine physical is not. In addition, there may be a waiting period of 90 days to 1 year before preventive services are “covered”. Check your policy before you schedule your appointment for preventive services.

The National Association of Chain Drug Stores reported that 52.6% of all prescription drugs sold in 2006 were  generic. This was a 9% increase over 2005. 

Hospital bills, X-rays, lab tests, major test such as Ultrasound imaging, MRI, CAT, MRA/MRS, and PET scans are subject to annual deductible and coinsurance. Assume you have a $1,000 annual deductible and 80% coinsurance with a $3,000 Out-of-Pocket (OOP) maximum. If you have a $1,500 MRI, you would pay $1,000 plus 20% of the balance of $500 which is $100. You total is $1,100.

What about a $100,000 hospital bill? You pay the annual deductible of $1,000 leaving $99,000. Now coinsurance comes into play. The insurance company company pays 80% and you pay 20%. Does that mean you pay 20% of $99,000 or $19,800? No! Remember the $3,000 Out-of-Pocket maximum? That means you pay 20% coinsurance UNTIL your 20% reaches $3,000. Then the insurance company pays 100% of the balance. You total cost for a $100,000 hospital stay is $1,000 (annual deductible) plus $3,000 (coinsurance) or $4,000. The insurance company pays $96,000.

Make certain you health insurance policy has a coinsurance Out-of-Pocket maximum. Typically $2,000 or $3,000. Some plans being offered have 80% coinsurance, but no limit on your share of coinsurance. In the hospital example, without an Out-of-Pocket maximum, you would pay $19,800 coinsurance plus $1,000 deductible or $20,800.

Some individual health insurance companies have an annual limit on the amount of money  they will pay for prescriptions.  This annual limit on prescription drugs ranges from $500 to $3,000. Some Texas health insurance policies have an unlimited prescription drug benefit. Ask about this before you chose a Texas health insurance policy.

An insurance company is just a large group of people (policy holders) who pool their money (premiums) together to pay the medical expenses of the group so that no one person gets hit with a catastropic bill for treatment. Each person contributes (premiums) to the pot so that the medical bills of the entire group can be paid. At the end of the year, the pool manager (insurance company) compares medical expenses paid out, money taken in, and the number of people contributing to the pool. You divide the expenses by the number of people and you get an average. When the medical expenses paid out increase over the last year, each person must put more into the pool for next year.

Each year we spend more on healthcare and more on prescription drugs than the year before. Since we receive more healthcare services each year, it is only natural that we pay more.

It doesn’t. Most people confuse what something cost with what is deducted from their pay check. A typical group health insurance premium for an empolyee is $350. The same person would pay $125 for an individual health insurance policy. But wait, I was only paying $87 per month at work. That is right. But you are overlooking the fact that the company was paying the other $263 per month for you.

Some companies have  plans that do not have a doctor office visit copayment. Is that good? Like most things, it depends. Let us say you are the average person who goes to the doctor twice per year. Since you have insurance, you are entitled to the discounted rates the doctor has agreed to offer to patients with insurance. He normally charges $150 for an office visit, but has agreed to accept the discounted rate of $80. If your plan has a $30 copayment, you pay $30, and the insurance company pays $50 so the doctor gets the agreed upon $80. If your plan does not have a copayment, you pay $80. How can this be good? Plans without a copayment are typically $50 per month less than those with a copayment. You save $600 per year. Two office visits per year without a copayment cost you an additional $100 ($80-$30 = $50). You pay $100 and save $600. That is a net savings of $500 to you. Plans without a doctor office visit copayment are a great way to save money.

Yes, most health insurance companies write child-only policies at very affordable rates.

Usually not. The extra premium cost is not justified.