With most of the Affordable Care Act’s major provisions now in effect, the nation’s health insurance marketplace has undergone a significant transformation. Obamacare impacts individuals, families and small business owners alike.
The Affordable Care Act is designed to make health insurance more accessible and affordable with income-based financial assistance and one-stop shopping via state-based and federally facilitated exchanges. Meanwhile, the private marketplace remains a place to shop for quality, affordable health insurance plans that meet ACA requirements.
The following guide offers a glimpse at the various types of ACA-compliant health insurance in Texas, including individual and family health plans, small group health plans, coverage for high-risk applicants, mini-COBRA continuation coverage, Medicaid, and CHIP.
Health and healthcare in Texas
Texas is the second most populated state in the U.S., based on 2010 Census data. As far as the percentage of uninsured adults children by state, it ranks No. 1. In 2011–2012, its uninsured rates were 1.5 to 2 times the national average with 32 percent (nearly 5 million) of the state’s adults ages 19–64 and 16 percent of its children ages 0–18 (nearly 1.2 million) lacked health insurance coverage.2
Though Texas may remain the state with the largest percentage of uninsured , the numbers have improved. Rice University’s Baker Institute for Public Policy and The Episcopal Health Foundation reported that between Sept. 2013 and March 2014, the percentage of uninsured in Texas dropped from 23.5 percent and 24.8 percent. This decrease is attributed largely to a rise in employer-provided health insurance, which increased from 55.8 percent in Sept. 2013 to 58.1 percent in March 2014, according to the same report. Approximately 746,000 Texans, 225,000 of which were previously uninsured, purchased health insurance through the state’s federally facilitated marketplace.5
Texas ranked 31st in United Health Foundation’s 2014 America’s Health Rankings. Its strengths include low drug deaths, few poor mental health days per month, and a low rate of cancer deaths.1 The report listed its challenges as a high prevalence of physical inactivity, a high percentage of uninsured, and a large disparity in health status by educational attainment.
Texas individual and family health insurance
When the Obamacare health insurance exchanges opened for 2014 enrollment, Texas defaulted to the federal health insurance marketplace. Those who buy ACA health insurance may be eligible for income-based subsidies, including premium tax credits that may be applied to any metal plan and cost-sharing subsidies that apply to silver plans. Texas does not apply a tax penalty known as the shared responsibility payment to individuals who go without ACA health insurance.
The U.S. Department of Health and Human Services reported that 733,757 individuals in Texas selected a marketplace plan through the exchange from Oct. 1, 2013, through April 19, 2014.2 In 2015, the number of individuals in Texas enrolled in a marketplace plan increased to 1,205,174 during the open enrollment period.3
Texas small group health insurance plans
In Texas, small businesses with 50 or fewer employees may purchase small group health insurance plans through the federally facilitated Small Business Health Options Program, SHOP Marketplace. Small businesses that use SHOP and have 25 or fewer employees may qualify for a Small Business Healthcare Tax Credit.
Self-employed individuals with no employees must apply for an individual health insurance plan via traditional means.
Texas state COBRA variations for small groups
The Consolidated Omnibus Reconciliation Act (COBRA) allows those employed by businesses with 20 or more employees to continue their group health insurance plan for a limited time should they lose coverage due to qualifying events such as termination of employment due to reasons other than gross misconduct, a reduction in work hours, divorce or legal separation, and loss of dependency status.
In some states, those who work for a small business and lose health insurance coverage due to a qualifying event may qualify for health insurance continuation through mini-COBRA programs. State mini-COBRA programs allow those who work for a small business and lose health insurance coverage due to a qualifying event to continue coverage, too. These programs generally work like the federal COBRA continuation coverage, but their terms may vary. Texas’s small group COBRA continuation variations are as follows:
|Mini-COBRA option||Yes; known as Texas State Continuation of Group Coverage|
|Eligible groups||Group health plans issued by insurance companies and HMOs subject to the Texas Insurance Code.|
|Extension of benefits period – standard||6 months for those eligible for COBRA as primary and secondary plan members—in addition to COBRA, which applies for 18 to 36 months9 months for those who are not eligible for COBRA as primary or secondary plan members.|
|Extension of benefits period – disabled||11 months for those with disabilities that meet Social Security Administration standards|
|Maximum premium increase||102 percent (100 percent of premium, plus 2 percent processing fee)|
|Additional notes||Employers must notify employees of the ability to continue coverage within 30 days of the end of employment. If an employee wishes to continue insurance coverage, he or she must notify his or her employer by the 60th day after group coverage was terminated.|
Texas high-risk pools
It used to be that health insurance companies could deny applicants or charge them more based on health history and preexisting conditions. When the Affordable Care Act was passed in 2010, many states created federally funded preexisting condition insurance programs or accepted federal funding to assist with similar high-risk pool programs they already operated.4
The Affordable Care Act prohibits this practice for health insurance plans considered minimum essential coverage with effective dates beginning Jan. 1, 2014, and later. As such, the PCIPS and state high-risk pools created to provide health insurance for those once considered uninsurable are being phased out.
Medicaid is a state health insurance program for low-income individuals under age 65, pregnant women, children, disabled individuals, and seniors over age 65; it is partially funded by the federal government. In 2014, states were given the option to accept additional federal funding and expand their Medicaid program eligibility to those who make up to 138 percent of the federal poverty level.
Texas opted not to expand its Medicaid program. A resulting coverage gap exists for those whose incomes are too high for Medicaid but too low to receive federal premium and cost-sharing assistance.
The information below is specific to Texas’ Medicaid program.
|Governing agency||Centers for Medicare & Medicaid|
|Administrator||Texas Health and Human Services Commission|
|Where to apply||https://yourtexasbenefits.hhsc.texas.gov/apply/how-to-apply|
|Residency requirements||Texas resident, U.S. citizen, qualified non-citizens|
|Eligibility||Determined by Texas Health and Human Services Commission|
|Medicaid enrollment period||Year-round in all states|
|Adult income eligibility limits as a percent of the federal poverty level (family of three)15||19 percent of FPL; annual income limit of $3,737|
The Children’s Health Insurance Program is a partnership between the states and federal government. CHIP provides health insurance to uninsured children who meet certain eligibility guidelines. The information below is specific to Texas’ CHIP and Children’s Medicaid programs.
|Program name||CHIP/Children’s Medicaid|
|Eligibility||Determined by the Texas Health and Human Services Commission|
|Residency requirements||Texas resident, U.S. citizen, qualified non-citizens|
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1 United Health Foundation. 2014 America’s Health Rankings Annual Edition. “Annual State Health Rankings.” http://www.americashealthrankings.org
2 Kaiser Family Foundation http://kff.org/other/state-indicator/state-marketplace-statistics-2014/.
3 Kaiser Family Foundation http://kff.org/other/state-indicator/state-marketplace-statistics-2015/.
4 National Conference of State Legislators. Coverage of Uninsurable Pre-Existing Conditions: State and Federal High-Risk Pools. Updated April 2014. Retrieved from http://www.ncsl.org/research/health/high-risk-pools-for-health-coverage.aspx.
5 The Henry J. Kaiser Family Foundation. “The Coverage Gap: Uninsured Poor Adults in States that Do Not Expand Medicaid.” April 2, 2014. Retrieved from http://kff.org/health-reform/issue-brief/the-coverage-gap-uninsured-poor-adults-in-states-that-do-not-expand-medicaid/.