When do individual health insurers have to sell me a policy?

In Texas, your ability to buy an individual health insurance policy from a private insurance company depends on your health status.

· In general, companies that sell individual health insurance in Texas are free to turn you down because of your health status and other factors. When applying for individual health insurance, you may be asked questions about health conditions you have now or had in the past. Depending on your health status, insurers might refuse to sell you coverage or offer to sell you a policy that has special limitations on what it covers. If you are turned down or offered a policy with reductions or restrictions, you may be eligible for coverage from the Texas Health Insurance Pool.

However, under no circumstance may you be turned down, charged more, or face a pre-existing condition exclusion period by an individual insurer because of your genetic information. Genetic information includes the results of a genetic test and your family history of health conditions.

· If you are HIPAA eligible, you will be able to buy coverage from the Texas Health Insurance Pool.

· In Texas, newborns, adopted children, and children placed for adoption are automatically covered under the parents’ individual health insurance for the first 31 days, if the plan covers dependents. The insurer may require that the parent enroll the child within the 31 days in order to continue coverage beyond the 31 days.

· Under Texas law, your grandchild may be covered under your individual health insurance policy. In order for your grandchild to qualify for coverage, your policy must cover dependents and your grandchild must be under 25 years old, unmarried, and dependent on you.

· Under Texas law, disabled adult children can remain covered under your individual health insurance policy after reaching the age at which dependent coverage is usually terminated, if they meet certain requirements. To qualify, your adult son or daughter must be incapable of self-sustaining employment because of mental retardation or physical disability and must be chiefly dependent on the policyholder for support and maintenance. Proof of incapacity and must be furnished to the insurer with 31 days of reaching the limiting age and may be required subsequently in the future.

What will my individual health insurance policy cover?

· It depends on what you buy. Texas does not require health insurers in the individual market to sell standardized policies. Health plans can design different policies and you will have to read and compare them carefully. Health plans are required to provide you with written descriptions of their products so that you can compare the differences.

· Make sure that the policy that you purchase covers all your needs. By law, all insurers in Texas must offer at least one plan that includes coverage for many required state mandated benefits, such as childhood immunizations and mammograms. However, Texas does permit insurers that sell individual health insurance to offer one or more Consumer Choice Benefits Plans, which are lower-cost plans that do not include all of mandated benefits normally covered in other insurance plans (for example, chemical dependency treatment or diabetes supplies and equipment).

What about coverage for my pre-existing condition?

· Individual health insurers can impose elimination riders. This is an amendment to your health insurance policy that permanently excludes coverage for a health condition nor even an entire body part or system.

· However, if you buy an individual health insurance policy from an HMO, you will not face a pre-existing exclusion period. HMOs in Texas cannot impose pre-existing exclusion periods.

· If you are buying a non-HMO individual health insurance policy in Texas, there are different ways insurers are allowed, at the time you purchase the policy, to exclude coverage for your pre-existing conditions.

An individual health insurer may also impose a pre-existing condition exclusion period. Pre-existing condition exclusion periods cannot exceed 24 months. However, if the individual health insurer does not ask you questions about your health or medical treatment history when you apply for health coverage and it does not exclude a condition by name on your policy, it can only exclude pre-existing conditions for 12 months.

When determining if a condition is pre-existing, an individual health insurer is allowed to look back 5 years to see if you actually received care for a condition. In addition, the insurer can look for evidence of symptoms for which most people, in the insurer’s opinion, would have sought care. This is called the prudent person standard. Individual health insurance policies can count pregnancy as a pre-existing condition, but not genetic information.

· After you purchase your individual health insurance policy, insurers can still exclude coverage for a pre-existing condition, even if it wasn’t specifically excluded by the terms of your individual health insurance policy. If you make a claim during the first 2 years of coverage, your individual health insurer can look back 5 years from the time of your application to see if the claim is for a condition that would have been considered a pre-existing condition. If the insurer determines, using the prudent person standard, that the condition is a pre-existing condition, it can refuse to pay for related expenses.

· Individual health insurers have to give you credit for your prior continuous coverage if your most recent coverage was under a group, government, individual, or church plan. The same types of coverage that are creditable in fully insured group health plans are also considered creditable in individual health insurance. Coverage is considered continuous if the gap between health plans is less than 63 days. If you have 18 months of continuous creditable coverage, you will not face a pre-existing condition exclusion period.

If your gap in health coverage was 63 days or more and your most recent coverage was under a group, government, individual, or church plan, you must be given credit for any creditable coverage in effect at any time during the 18 months preceding your application for coverage. This means that although you will have a pre-existing condition exclusion period, it will be shorter than it would otherwise be.

What can I be charged for my individual health insurance policy?

· Generally, in Texas, there are no limits on how much individual premiums can vary due to age, gender, health status, family size, and other factors. However premiums cannot vary based on your genetic information.

· When you renew your individual coverage, your premiums will increase based on your age and other factors. However, premium increases must be applied to all persons in your class and not on an individual basis. A class may be grouped by age, sex, or by each individual health insurance product.

Can my individual health insurance policy be canceled?

· Your coverage cannot be canceled because you get sick. This is called guaranteed renewability. You have this protection provided that you pay the premiums, do not defraud the company, and, in the case of managed care plans, continue to live in the plan service area. However, guaranteed renewability does not protect you from having your premiums go up at renewal, and premiums can also increase within limits as you age or your health declines.

· However, if you make a claim during the first two years of coverage under your policy, the insurer might re-investigate information you provided during the application process to determine whether you made a misstatement. If so, the insurer might try to take back your policy and void coverage altogether. If you become involved in one of these “post-claims” investigations, be sure to call the Texas Department of Insurance to learn more about your rights.

· Some insurance companies sell temporary health insurance policies. Temporary policies are not guaranteed renewable. They will only cover you for a limited time, such as 6 months. If you want to renew coverage under a temporary policy after it expires, you will have to reapply and there is no guarantee that the health plan will be-reissued at all or at the same price.