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Changes on the Horizon for Health Insurance in Texas

Texas has yet to establish its own state health insurance exchange and is unlikely to do anytime soon, especially since the U.S. Supreme Court has upheld federal subsidies for insurance bought through However, several changes are on the horizon for health insurance in Texas for those individuals who purchased insurance through the national exchange as a result of the Affordable Care ACT (ACA). These changes will affect larges numbers of people, because 1.2 million Texans enrolled in private health insurance plans through the exchange in 2015.

New QHP Designation for Policy Cards

On June 17, Governor Greg Abbot signed House Bill 1514 into law. That means that as of September 1, health insurance providers will be required to label policy ID cards with the acronym QHP, which means “qualified health plan,” if the insurance was bought on the exchange.

The point of the designation, say supporters of the law, is to inform health care providers that their patients are in the exchange so that they can remind those patients to stay current with their premiums to ensure continued coverage. Those who object to the law, however, argue that it unnecessarily alerts providers to the fact that patients are likely receiving a subsidy for health insurance. After all, over 85% of Texans who purchase insurance through the exchange receive such subsidies. If a patient is receiving subsidies, there is a 90 day grace period if he or she fails to pay premiums on time. This might make health care providers less likely to take on patients with the “QHP” designation. Thus, the law continues to remain controversial.

Future Rate Changes

While the average rate increase for a plan on the exchange was just 5% in Texas in 2015, larger hikes in premiums may be in the future. Of the fifteen carriers who are offering health insurance plans through the exchange, eight put forth requests for rate increases of ten percent or more. One, Time Insurance, requested a hike as high as 65 percent in the state of Texas, but its parent company, Assurant Health, is now leaving the individual market. These rates are currently under review by the U.S. Department of Health and Human Services (HHS), and they do not take into account federal subsidies. Therefore, the actual premiums paid will be lower for most people purchasing insurance through the exchange.

Changes to the Texas Exchange

While open enrollment for the year 2015 is now closed, the new open enrollment period for the year 2016 will begin on November 1 of this year. Health care coverage for plans purchased during that time will then begin on January 1 of 2016. New plans are being added to the exchange, and most Texans should have over 30 from which to choose. In some areas, such as Dallas county, there are as many as 64 plans from which to select.

On the other hand, “grandmothered” plans will not renewable in Texas in 2016, as state regulators have failed to issue guidelines on the renewal of such plans. Instead, “grandmothered” plans will need to be replaced with insurance coverage that complies with the Affordable Care Act.

These are a few of the most important changes ahead, and they will not only affect people who purchase insurance on the exchange. The entire health insurance industry is influenced to some degree by what happens on the exchanges, so be on the look-out for changes to private health insurance obtained through employers or other sources as well.