There are several changes coming to Texas health insurance in the coming months. The Dallas Morning News has reported several in the works in two recent articles; one involves the loss of an individual plan option and the other addresses requested rate increases. The changes will impact people with individual policies the most.
Blue Cross PPO: Blue Cross of Texas will drop its individual PPO option. PPO, or Preferred Provider Organization, policies or plans typically have more options. These options allow an individual to usually maintain the relationship with a primary care physician, OB-GYN, pediatrician, and other physicians. In addition, more hospitals and other medical facilities are accessible on these plans.
Blue Cross’s decision to drop their individual PPO plan affects approximately 365,000 Texans who currently have it. The decision to do away with this plan is attributed to $400 million in losses last year. The losses were partly to blame on BCBS have an overly aggressive price for the plan which resulted in a large number of uninsured coming on board. In addition, they did not anticipate the amount of claims that occurred.
People who currently have the Blue Cross PPO plan will either have to migrate to their HMO plan or find a plan with another insurer. Health Maintenance Organization, or HMO, plans typically have fewer options. Policyholders form a relationship with a group or clinic. When scheduling an appointment, the patient can be seen by any physician in the group as the group takes the place of the relationship with the individual primary care physician.
Costs are lower because they are more tightly controlled by the insurance company. In addition, HMOs usually have fewer doctors and hospitals in their network. Those who migrate to this plan need to confirm what hospitals participate in the plan. Other restrictions may include higher out of pocket charges for going to an out of network physician or medical facility.
Rate Increases: In addition to dropping their individual PPO plan, Blue Cross of Texas has requested the Texas Department of Insurance (TDI) approve a rate increase on their individual HMO plan of 20%.
Blue Cross isn’t the only company requesting TDI approve a rate increase. There are 32 rate filings that have been submitted to TDI for the 2016 individual market. Most requests seek approval to raise rates more than 20% for the upcoming year. There is no guarantee the rate increases will be approved or that health insurance companies won’t lower them during the review process. Nine of the 23 filings for individual rate increases for 2015 were reduced.
Group Plans: While Blue Cross of Texas is dropping their individual PPO plan, they are keeping it for their group or employer provided plans. BCBS will raise rates for these plans too, but at a more modest rate of 5%. I expect other companies will follow suit with similar rate increases for their group plans.
Final rates will be announced in October for the upcoming year. In order to keep the cost of individual health insurance affordable, here are five items to review when final rates are released.
- Compare options from multiple companies such as BCBS, Humana, Aetna, Cigna, Ambetter, First Care, Molina Health Care, Scott & White Health Plans, and United Healthcare.
- Compare plans available through the exchange (healthcare.gov) to plans available through an insurance agent who represents multiple companies. Sometimes the rates are different.
- Contrast different plans such as PPO and HMO. While there are few options on an HMO plan, they are more affordable than PPO plans.
- Examine the impact of different deductible levels. Higher deductibles mean more out of pocket expense when care is provided but lower monthly rates.
- Look at a high deductible plan with a health savings account. Regular monthly contributions do carry over from one year to the next if unused.
What are you doing to control the cost of your health insurance? Share your thoughts, suggestions, and questions with me on my Google +, Facebook, and LinkedIn pages. I’d love to hear from you!