Protecting Your Family and Property
The maximum pre-existing condition waiting period is two years for an individual health plan, one year for an employer-sponsored health plan and up to two years for a group plan not sponsored by an employer.

— Reducing or Eliminating Pre-Existing-Condition Waits
It is possible to shorten or eliminate pre-existing-condition waiting periods if you are switching health plans or recently have had coverage. Time spent covered under a previous health plan is “creditable” toward any new plan’s waiting period as long as there was no gap in coverage greater than 63 days. For example, if you were covered by one health plan for the past year but switched to a new plan with a pre-existing-condition waiting period of a year, you do not have a waiting period with the new plan.

— Additional Precautions
Following are essential steps to remember and pitfalls to avoid when applying for new insurance:
  • Fill out the application accurately and completely. Knowingly providing incomplete, incorrect or misleading information—especially about pre-existing conditions—can result in canceled coverage or denied benefits.
  • Verify any information filled in by an agent, and never sign a blank policy application.
  • Make checks or money orders payable directly to the insurance company or HMO, not the agent.
  • Insist on a signed receipt on the carrier’s letterhead, and keep on file the full name, address and phone number for both your agent and carrier.
  • Never pay more than two month’s premiums until receiving a copy of the policy, HMO certificate or group-membership certificate.

Texas state law also requires that prospective members receive a 10-day “free look” to evaluate any individual coverage policy, during which you can cancel and receive a refund. A returned policy must be sent by certified mail with a return-receipt requested.

Health Plan Rates
Texas, like most states, cannot regulate or approve health plan rates so insurance companies and HMOs set their own premiums, and small- and large-employer plans must give 60 days’ notice before any rate increase takes effect.

Health plan rates generally are calculated based on the following factors:
  • Coverages. The more conditions covered by your plan, the greater the carrier’s risk is of paying so premiums increase.
  • Covered dependents. Adding a spouse or dependent children to a plan will raise premiums.
  • Claims history. You can expect to pay more if you have filed claims in the past.
  • Age. Older people require more—and more expensive—health care so premiums reflect the age of you or the members in a group plan.
  • Deductibles. Plans with higher deductibles for out-of-pocket expenses typically have lower premiums.
  • Number of group participants. As group size increases, administrative costs per member decrease and so do premiums because claims risk is distributed across a larger population. Smaller groups and individuals tend to buy health coverage based on targeted needs, which increases the likelihood of claims and increased premiums.
  • Gender. Young males incur lower medical costs than young females, particularly during childbearing years. The variance reverses with age when medical costs for males begin to exceed females in the late 50s and early 60s. Plans with a large number of young females or older males generally have higher rates than other groups.
  • Geography. Health costs vary by region because of cost-of-living differences, medical practices and medical competition in the area.
  • Industry. On an employer-sponsored plan, rates may be affected by the nature of the profession. Some industries have higher medical-claims costs than others because of working conditions or the likelihood of accidents. High employee turnover in some industries also can result in higher costs.

— Handling Rate Increases and Other Issues
Premiums can rise more quickly for individual plans because no employer or plan sponsor can help bear the cost. If the premiums reach a point beyond what you are able to pay, you possibly can save money by asking for a revised individual plan. Reduction options include raising the deductible or copayment, increasing the maximum out-of-pocket payment or changing what is covered. Before making any changes to your plan, make sure you are not dropping any essential coverage and that you ask your carrier if you are allowed to add back any dropped benefits later.

If you cannot negotiate a good deal on your current plan, consider switching to a new plan or carrier that can meet your needs. Just remember that if you have or recently had a medical condition, you may face difficulties finding new coverage. If you do have a serious health condition and cannot find coverage, you can join the Texas Health Insurance Pool ( or look for coverage through government programs.

If at all possible, try to keep your current coverage until new coverage takes effect because most companies do not begin coverage until after approving your application and delivering your policy. Plus, gaps in coverage can leave you vulnerable if you are sick or injured and can result in longer waiting periods before pre-existing conditions are covered by a new plan.

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