Focus Report, Volume 76, Number 5, February 1999 Page: 10
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the company's proposed merger with Illinois Blue
Cross/Blue Shield.
Should THKC be part of CHIP? Some say THKC
presents a ready-made solution to help families help
themselves in obtaining health insurance for their
children under CHIP. THKC health benefits, though
they would have to be modified to conform to federal
requirements, already are specially designed for
children's care and available for purchase on a sliding
scale by poorer families. Opponents of incorporating
THKC into CHIP say that THKC was promoted in the
last session as a potentially self-sustaining nonprofit
entity and that subsidizing it with taxpayer dollars
through CHIP would make it more like a government
program.
Texas Health Insurance Risk Pool
The risk pool offers health coverage to Texans who lack
access to health insurance because of health problems or
lapses in employment or employer-sponsored coverage. The
1989 Legislature created the pool but left it unfunded. The
1997 Legislature revised and funded it (HB 710 by
Averitt). The pool was revived to meet federal requirements
under the federal Health Insurance Portability and Access
Act, enacted by Congress in 1996 to guarantee health
insurance for those who lose coverage.
Health coverage under the risk pool was made
available to the public on January 1, 1998, and about
3,000 enrolled in the first year, as expected. Enrollment
is expected to reach a maximum of about 12,000 to
13,000 after several years of operation. Premiums for
risk pool coverage, which is offered under two managed
care plans, may run 50 percent to 100 percent higher
than market prices, but the plans cover medical
conditions normally rejected by private companies. If
plan premiums fall short of the cost of claims, private
health insurance plans can be assessed to support the
pool.
Plan I has a $500 deductible and a $2,500 limit on
out-of-pocket expenses when using network health-care
providers and a $4,500 limit when using out-of-network
providers. Plan II has a $1,000 deductible and out-of-
pocket limits of $4,000 when using network providers
and $7,000 when using out-of-network providers.
Premiums range from $67 to $808 per month, depending
on the insured's age, sex, residence zip code, and
whether or not the insured is a smoker. Premium rates
may be reevaluated in early 1999.Major issue:
" Assessment formula. As more and more people
enroll in the high-risk pool, the amount of money
needed to cover claims costs also will rise. Texas
Department of Insurance officials say the statutory
methodology used to calculate assessments on private
health-benefit plans may have to change to meet
growing need. The risk pool could be shut down if
claims costs are not met. Under federal law, private
health-benefit plans then would be required to issue
insurance to all who apply and meet other federal
requirements - an unpalatable alternative for many
insurers.
Health Coverage for Small Businesses
The Texas Insurance Purchasing Alliance (TIPA) is a
nonprofit corporation established by the 1993 Legislature
to help businesses with two to 50 employees obtain
health-care coverage (Texas Insurance Code, art. 26.11
et seq.). TIPA operates under a six-member board
appointed by the governor and approved by the Senate.
The Legislature provided $250,000 in fiscal 1994-95 for
start-up costs, and TIPA has been funded by member
dues since then. In Texas, as in the rest of the U.S.,
most uninsured people are employed, either.full-time or
part-time, and about half are likely to work for small
businesses. In 1993, small businesses told the
Legislature that they would like to offer insurance for
their workers, but the plans are often cost-prohibitive
due to administrative overhead and the small size of the
risk group.
The law allows employers to form a cooperative to
purchase coverage from a private insurer or to purchase
directly through the TIPA umbrella cooperative.
Amendments in 1995 (HB 369 by Averitt) required
insurers selling to small businesses to provide a basic
benefits plan and a catastrophic plan. Insurers are
required to issue and renew plans for any small
employer who satisfies premium payments.
Initially, TIPA offered multiple plans and carriers,
allowing small-business employees to choose among these
on the basis of premium affordability and doctor choice, as
employees of larger businesses are able to do. The lack of
participating carriers, however, has curtailed such freedom
of choice. Only Blue Cross/Blue Shield serves TIPA
employers statewide, and only in San Antonio is there an
alternate carrier, Wellchoice HMO.(continued on page 12)
House Research Organization
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Texas. Legislature. House of Representatives. Research Organization. Focus Report, Volume 76, Number 5, February 1999, periodical, February 4, 1999; Austin, Texas. (https://texashistory.unt.edu/ark:/67531/metapth641172/m1/10/: accessed July 16, 2024), University of North Texas Libraries, The Portal to Texas History, https://texashistory.unt.edu; crediting UNT Libraries Government Documents Department.