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Why Do I Need Health Insurance in Texas?

The need to maintain good health and delay prematurely getting old and dying is important to everyone. This makes health insurance the most important type of insurance.

Why is Health Insurance Necessary?

Although no one plans to get sick or hurt, everyone eventually does get sick or injured, and in the end, medical care is necessary for the treatment. Additionally, health insurance helps you get quality medical care at lower rates than you would get on your own.

You need health insurance because of its two key roles.

Health insurance:

  1. Provides financial protection during emergencies and

  2. Makes health services more affordable.

Health insurance financially protects you from expensive medical costs in times of emergencies. Texans without health coverage have to pay high medical costs out-of-pocket, which could lead to debt and even bankruptcy. Medical care is quite expensive without health insurance coverage. For example, a broken leg surgery can cost over $7,500. On average, it costs $7,000-10,000 to spend a day in a Texas hospital. And it can cost hundreds of thousands of dollars to receive comprehensive treatment for such issues like cancer. Health insurance protects you from such high and/or unexpected costs.

The variety of Texas health insurance options makes health services more affordable through:

  • Discounts and subsidies of ACA-compliant health plans, according to income level and/or group size.

  • Alternative health insurance options, for those who decide against the ACA-compliant marketplace plans due to cost or any other reason.

  • Pre-negotiating billing rates, which give the insured access to lower-priced in-network providers from the first day of coverage (regardless if the payment is done through the insurer or paid out-of-pocket).

If you apply for insurance through the Health Insurance Marketplace, you might qualify for lower costs or discounts that can help you save money on premiums.

If you are 30 years old or younger, there are health insurance options for young adults. For example, you can use a Catastrophic health plan to protect yourself from worst-case scenarios. Young persons can also use student health plans or stay under their parent's plan until the age of 26.

Catastrophic health plans have lower monthly premiums and higher deductibles. This type of a plan can be a good fit for younger and healthy people who may think that they do not need health insurance because they rarely see a doctor.

There are also Short-term plans, which are very popular in Texas. Short-term health insurance is meant to provide temporary coverage while there is no permanent (Group or Marketplace) ACA-compliant coverage in place. Short-term insurance is supposed to protect the insured from costly medical expenditures resulting from unforeseen health changes or crises while they are either shopping for permanent coverage or switching employers. In reality, Short-Term health insurance, in combination with a sound Indemnity plan, are a frequent choice of the Texas' self-employed, who renew this coverage year after year.

Additional health insurance benefit of ACA insurance

Providing coverage regardless of the pre-existing conditions is not the only key benefit of the Affordable Care Act (ACA) insurance. ACA-compliant insurance is also distinguished by offering the Essential Health Benefits (EHB) and preventive services like periodic checkups, vaccines, and screening tests at no extra cost to the insured at the time of the service. There are preventive services for adults, women, and children. Preventive health services help with the early detection of health problems before they become serious. This is done in order to prevent the many illnesses that cause people to be admitted into the ER.

(Note: Some Texas short-term health insurance plans may offer a modified version of covered EHBs and preventive services)

Discuss your health insurance options with a state-licensed health insurance agent with access to a large pool of varied health products. Licensed insurance agent is legally able to analyze your needs and make a professional recommendation.

What is a Negotiated Rate Health Insurance?

A negotiated rate is the sum agreed upon by an insurer to pay for each type of service covered by a contracted doctor, medical facility, lab, or pharmacy. Negotiated rate is the price of service at in-network medical facilities.

Why Should you Care about the Negotiated Rate of Health Insurance?

An insured person ends up paying less for the same services than a person without health insurance coverage - even before deductible, copay, or co-insurance are met.

  • For example, if you are using an in-network provider, you might be able to get a flu vaccination for $25 instead of the $40 that someone without insurance would have to pay. In some circumstances, the savings can be much more substantial. If you use a network provider, you may pay $85 instead of $150 for an office. You may be able to save even more with more expensive services.

Health insurance companies sign agreements with a network of hospitals and other medical providers. The agreement includes the pre-negotiated fees for a list of services under the contract. A CT scan, for instance, may be available for a $500 negotiated fee through your health insurance carrier, while an uninsured person may be billed up to $3,000 or more. The negotiated fee is frequently lower than what the provider would charge an uninsured person.

Provider networks offer health insurance companies preferred rates because as a result, the networks acquire access to guaranteed client base. Since most insurers do not cover out-of-network treatment, the insured are far more inclined to visit doctors within their network.

Various insurance companies have different negotiated rates. Larger insurers, for example, may have more negotiating power since they have bigger consumer bases. For a CT scan, a large health insurance company might negotiate a $500 rate, whereas a smaller insurer may negotiate a rate of $700. If you change health insurance companies, you may discover that the pricing for the same medical services is different than they were before you changed. This is partially due to an additional copay or coinsurance structure, but it is likely because of the negotiated rates.

It can be hard to compare negotiated costs for different plans because they vary from provider to provider. If you are considering moving plans or health insurance companies, ask your current health provider if they have a record of negotiated rates. It will most likely be your best resource.

Reach out to at least 2 Texas-licensed health insurance agents and ask them for advice based on your specific needs. Compare the two answers, ask a lot of clarification questions, and pick the choice that fits your needs the most.

How Many People in Texas Have no Health Insurance?

Texas is one of the highest uninsured states, with about one out of five residents lacking proper health coverage. It is estimated that over five million Texas residents do not have health insurance. This includes about one million uninsured children under 18 years old. The lack of health insurance has both medical and financial impacts on Texas residents.

  • Medical impact : According to the Texas Medical Association (TMA), uninsured people are four times less likely to have regular health care and are more likely to die from health-related conditions. Even for symptoms that can have significant health repercussions if not treated, they are much less likely to receive essential medical care. One out of every six Texans lives in poverty, and nearly one out of every five children lives in poverty. Extending health coverage to the uninsured could result in a 7-8% improvement in their overall health.

  • Financial Impact of Texas' Uninsured Crisis : Without medical coverage and an established primary care physician, uninsured persons are more likely to seek health care in the emergency room, which is the most expensive option. According to the Centers for Disease Control and Prevention (CDC), roughly 4.3% of ER visits (6.3 million) are for non-urgent conditions that should be handled in a non-ER doctor's office or clinic.

There are various reasons why people do not have health insurance in Texas. These reasons usually include:

  • Inability to afford to pay for insurance,

  • Self-employed or working for a company that does not provide health insurance,

  • Job loss and the insurance coverage that came with it,

  • Never needed insurance and was unaware of the implications of not having it until it was needed.

  • Ineligibility for coverage because of age,

  • It was too complicated or confusing to research and sign up for a plan.

To help more people afford health coverage, Texas makes it possible to purchase multiple types of health insurance, fitting various needs and price points. Anyone in need of health insurance should seek a licensed Texas health insurance professional to receive advice on the available cost-effective ways to obtain health coverage. At the very least, every Texan should have some Emergency Health Coverage.

Emergencies, like car accidents, are unexpected, and nobody deserves to be in pain, in need of treatment, and without health insurance. Emergency health coverage is usually available at a discounted price. Discuss your options with a licensed Texas health insurance agent, who has access to different types of health coverage.

International Travel

Frequent international travelers, even if it is just across the border into Mexico, should consider getting travel health insurance coverage. Health insurance purchased in the United States might not be fully compatible with your travel destination. Check with your health insurer for details. If your existing coverage does not extend to the country of your choice, contact an agent who specializes in travel health insurance.

Travel health insurance is available for most countries.