State RegulationsTX specificDifficulty 2/5
A San Antonio enrollee is diagnosed with a serious illness and uses hospital services heavily. At renewal the HMO tells her that her coverage will not be continued because of her medical condition. What is the status of this action?
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Answer & full 3-part explanation (select an option above, or peek)
Why D is correct
Under TIC 843.208 and 28 TAC 11.506(3), an HMO may not cancel or refuse to renew an enrollee's coverage because of health status, medical condition or use of services. Renewal is guaranteed except for the grounds the statute permits, such as nonpayment of charges or fraud in the enrollment application. A nonrenewal driven by the enrollee's illness is therefore improper, and TDI can order the coverage continued and sanction the HMO.
Why the other options are wrong
- A) Offering a conversion contract does not cure an otherwise prohibited nonrenewal.
- B) Nonrenewal is not discretionary; it is available only for the statutory grounds.
- C) Comparing claims to premium is exactly the prohibited health-status and claims-experience reasoning.
Memory hook
Renewal is guaranteed; the only thing that should end it is a statutory ground.