What is the Health Insurance System Like in Texas?
Texas leads the uninsured rate in the US. Although the number of uninsured people is steadily declining, 17 percent of the population remains uninsured. The high uninsured rate partly reflects the insurance system in Texas. Bellaire ER sought to breakdown the Texas health insurance system for an in depth look.
Affordable Care Act
The ACA has a significant impact on the Texas health insurance system. Under this act, more people were able to get health insurance, and the number of uninsured people dropped to below 20 percent for the first time.
Part of the reason why there was a drop in the number of uninsured is that the ACA prohibited health insurers from refusing to grant people insurance due to a preexisting condition. Therefore, more people who had preexisting conditions were able to enroll.
The ACA also imposed a tax penalty for those who did not get health insurance. This incentivized people to get insured.
The ACA required states to create a statewide marketplace. Those that didn’t would use the federally facilitated marketplace. Texas is one of the states that have a federally facilitated marketplace. There are also private marketplaces for private insurers who don’t list their plans on the federal exchange.
The Children’s Health Insurance Program (CHIP) insurance cover is meant for children whose parents might not qualify for Medicaid. This might be because the parents’ income exceeds the maximum required income for them to qualify for Medicaid. CHIP has seen most of the children in Texas get health insurance. This has caused a large disparity between the rate of uninsured adults and children. CHIP makes it easy for children to access medical insurance while strict restrictions on Medicaid make it harder for adults to enter the program.
Texas is also one of the states that rejected Medicaid expansion. The expansion was meant to increase the bracket of low income earners that would be able to get health insurance under Medicaid. The expanded bracket includes adults and parents who earn less than 138 percent below the federal poverty level.
However in Texas, since the state rejected Medicaid expansion, adults who do not have disabilities and are not caring for any child do not qualify for Medicaid. Adults who have dependent children only qualify if their household income is less than 18 percent of the federal poverty level.
Texas has a large number of private health insurance providers. Blue Cross and Blue Shield (BCBS) is the largest insurance provider in the individual market. BCBS holds more than half of the individual market share in Texas. Other insurers include FirstCare and Baylor Scott &
There are also national carriers operating in the Texas individual market. These providers include Humana, UnitedHealthcare, and Aetna.
There are various market plans for health insurance used in Texas. Exclusive provider organization (EPO), health maintenance organization (HMO), and point of service (POS) are the most common plans. EPO requires you to visit a certain physician or facility within the plan network. HMO covers in-network hospitals and doctors. POS covers healthcare providers within the network and requires you to get a referral to see a specialist.
Preferred Provider Organization (PPO) was a popular market plan before 2016. The plan does not require you to get a referral from your PCP when you need to see a specialist. You can also visit other out-of-network practitioners, but you will have to cater for more out-of-pocket costs.
In 2016 BCBS realized huge losses and decided to discontinue the PPO plan for its clients. Almost all other insurers did the same. Nowadays it has become difficult to find a health insurer offering the PPO plan.
All the plans listed above are mandated to cover emergency costs whether in-network or out-of-network.
Texas still has a large portion of its population that is uninsured. This might be partly due to the following:
Texas hosts a large number of immigrants. This is a major factor for the state since it is located on the border with Mexico. 17 percent of the Texas population is made up of immigrants. Generally, immigrants have the lowest rate of health insurance. Among the immigrant population is the undocumented immigrants. These people cannot acquire health insurance legally, and hence the whole undocumented immigrant community doe not have health insurance.
Texas has some of the most stringent restrictions on joining Medicaid in the US. The state’s refusal to expand the Medicaid program means that a large portion of low income earners cannot enroll for the health insurance. The low maximum income limit of 18 percent below FPL also locks many people out of the program.
Lack of work insurance
Many small businesses in Texas do not offer health insurance to their workers. Most of these businesses are in the retail, agricultural, and service industries which are unlikely to offer health insurance. Since this is not one of the requirements of the ACA, the rates of the uninsured remain high.