Texas May Be Getting Smart About Health Insurance Cards

Every individual who has health insurance in Dallas, Houston and elsewhere in Texas probably has an insurance card that he/she carries in his/her wallet. Politicians in Texas are considering taking this concept one step further by requiring health insurance companies to electronically embed coverage information into health insurance "smart" cards.

By swiping such a health insurance smart card at a doctor's office or hospital, your healthcare provider, and you, would get real-time information including: what your co-payment is, whether your deductible has been met, which providers are in your network and which procedures are covered.

"I'm a physician. I can't even tell you what my own insurance covers," Corpus Christi ophthalmologist Jerry Hunsaker told a House committee considering the so-called smart card legislation in April 2007.
Recently, the Texas House of Representatives overwhelmingly approved a bill by Rep. Beverly Woolley (R-Houston) that would establish a pilot program. Now the measure is in the Senate.

Austinite Jeannie Rollo said the proposal sounds like a good idea. She fell and broke her leg in December 2006. Jeannie said that she had no idea whether the doctors treating her at the hospital there were in her network. "At that moment, I was in no condition to pick up my phone and call the insurance company about what kind of coverage I had," said Rollo, executive director of the Lawyer Referral Service of Central Texas. The insurance company ended up paying the bill, she said.

Other individuals in Texas haven't been so lucky, said Susan Strate, a Wichita Falls pathologist who is also chairman of the Texas Medical Association's council on socioeconomics. Sometimes, she said, "the procedure is finished, the care has already been given, and the patient is thinking that their out-of-pocket expenses are X. But it turns out to actually be X plus Y."

Strate said that having clear information in advance would help doctors better counsel patients on the most affordable and effective treatments available.
Woolley said her bill would cut down on administrative costs and reduce errors. She said she had received the idea from a constituent who pointed out that health insurance cards could have embedded information much like Texas drivers' licenses do.

Some health plans already embed patient information into insurance cards, though health insurance providers are not required to do so in Texas. The Texas Association of Health Plans supports the bill, according to Executive Director Jared Wolfe. He said that having the information up front could help prevent payment disagreements between health plans and health providers after a procedure. Woolley's bill does not specify the technology that would be used to put the information in the cards.

A successful smart card program for health insurance was instituted several years ago in the country of Taiwan. It was created by Taiwan's Bureau of National Health Insurance (BNHI) to increase efficiency and decrease errors and fraud. The BNHI decided to replace its paper-based patient identification system with one built around Sun Microsystems' Java-based smart cards. Less than a year after the first cards were distributed, the system was up and running nationwide for the country's 22 million people.

The cards aren't just another high-tech way to make sure that patients are who they say they are. Identity theft is a health care problem in any country, with an increasing number of individuals using stolen identities to seek treatment to which they are not entitled.

Furthermore, a paper-based system is hard to monitor and open to abuse, so unnecessary procedures can slip through. The smart cards help clamp down on many abuses and cut down on health-care costs. The cards are also intended to make treatment more efficient and safer.

The Taiwanese patient cards have 32 kilobytes of memory, and can store vital patient information including allergy information, organ donor status, emergency contact numbers, medication, prenatal information, and personal insurance data. A quick swipe and doctors have easy access to information they need to make fast, accurate decisions.