State RegulationsTX specificDifficulty 1/5
Which of the following is a proper ground for a Texas HMO to cancel an enrollee's evidence of coverage during the contract term?
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Answer & full 3-part explanation (select an option above, or peek)
Why D is correct
Under TIC 843.208, an HMO's ability to cancel or refuse to renew coverage is limited to the grounds the statute recognizes, and failure to pay the required charges for coverage is one of them. Even then, the HMO must follow the required advance notice procedure before coverage ends. Getting sick, using services, or relocating inside the approved service area are not grounds for cancellation, because a prepaid plan exists to deliver care to the people who need it.
Why the other options are wrong
- A) A change in health status is not a permitted ground for cancellation or nonrenewal.
- B) Claims experience cannot be used to terminate an individual enrollee's coverage.
- C) Moving within the HMO's approved service area does not affect the enrollee's eligibility.
Memory hook
Nonpayment cancels; getting sick never does.