Health Insurance Frequently Asked Questions
What is a deductible? - It is a specific dollar amount that an individual must pay (or "satisfy") before reimbursement for covered expenses begin. Generally, the higher the deductible, the lower the cost of the Texas health insurance plans.
What is co-insurance? - The co-insurance clause requires you to pay a percentage (or a fixed amount) of your covered medical expenses. The percentage is usually expressed as "80/20" co-insurance. This means after you have paid the deductible amount (if any) as stated in your policy, you will pay 20% of the medical bills and the insurance company will pay the remaining 80% of the covered medical expenses. When your total expenses reach a dollar amount stated in your policy (the “co-insurance limit” or “out of pocket limit”), the insurance company pays 100% of the covered expenses up to the maximum benefit of your policy.
What is an HMO? - A health maintenance organization (HMO) is an organization that provides comprehensive health care to a voluntarily enrolled population at a predetermined price. Members pay a fixed fee, directly to the HMO and in return receive health care services as often as needed.
When does my coverage begin? - All Texas health insurance plans are subject to underwriting approval before they become effective. The underwriting process can be as short as one day and as long as 3 weeks. Do not cancel any current Texas health insurance policies until issued an effective date on your new policy.
What is a waiver? - A term used when a specific health issue of the insured is not covered due to previous history. Some are temporary and some are permanent. Not all insurance carriers use waivers and you should call Selected Benefits at (866) 270-6209 if you have questions about whether a certain health issue would result in a waiver. We’ll be sure to place you with the insurance company that will treat you the most favorably during underwriting.
What is exclusion? - An exclusion will state the type of injuries or illnesses that are not covered. All policies have exclusions. The most common types of exclusions are pre-existing conditions, self-inflicted injuries, cosmetic procedures and injuries incurred while committing a criminal act. Injuries resulting from some specific activities may also be excluded.
What are "out of pocket" costs? - An insured's "out of pocket" costs under major medical plans include the deductible, cost-sharing amounts arising from the operation of the coinsurance clause and medical expenditures that are deemed by the plan to be in excess of "reasonable and customary" charges. Only charges that are "reasonable and customary" for a specific type of service, in a particular location or geographic area, are eligible for reimbursement under medical expense plans. The definition of "reasonable and customary" may vary somewhat from one medical expense plan to another.
What is a “Co payment”? - Under a co payment or co pay provision, the insured usually is required to pay a set or fixed dollar amount (e.g., $25) each time a particular medical service is used. Co pay provisions can apply to either a doctor visit or a prescription and will vary according to the service or type of prescription that the insured fills at the pharmacy.