Medicare in Texas

Medicare enrollment in Texas

The number of Medicare beneficiaries in Texas stood at more than 4.5 million as of October 2022. Only Florida and California have more residents enrolled in Medicare.

But less than 15% of the Texas population is enrolled in Medicare, compared with about 19% of the United States population enrolled in Medicare. Texas has among the youngest populations in the country, and since most people become eligible for Medicare enrollment when they turn 65, the state’s lower median age results in a smaller percentage of its residents filing for Medicare benefits.

Although most people become eligible for Medicare coverage enrollment when they turn 65, Medicare also provides coverage for people under age 65. Those who have been receiving disability benefits for 24 months, have ALS, or have end-stage renal disease are eligible for Medicare. Twelve percent of all Medicare beneficiaries in Texas — and nationwide — were under the age of 65 as of April 2022.

Medicare health insurance options

In most areas of the country, Medicare beneficiaries can choose Original Medicare or a Medicare Advantage plan.

Original Medicare is provided directly by the federal government and includes Medicare Parts A and B. Medicare Part A, also called hospital insurance, helps to pay for inpatient stays at a hospital, skilled nursing facility, or hospice center.

Part B, also called medical insurance, helps pay for outpatient care like physician services, kidney dialysis, preventive care, durable medical equipment, etc.

Medicare Advantage plans are administered by private insurance companies that have contracts with the federal government. Medicare Advantage plans include all of the benefits of Original Medicare (albeit with different cost-sharing, as the plans set their own deductibles, coinsurance, and copays, within the limits established by the federal government), and they typically have additional benefits, such coverage for prescription drugs, dental, and vision.

But provider networks are often limited with Medicare Advantage plans, and out-of-pocket costs are typically higher than a person would have if they opted for Original Medicare plus a Medigap plan. In short, there are pros and cons either way, and no one-size-fits-all solution.

Medicare beneficiaries can switch between Medicare Advantage enrollment and Original Medicare (and can add or drop a Medicare Part D prescription plan) during the Medicare annual election period, which runs from October 15 to December 7 each year. Medicare Advantage enrollees also have the option to switch to a different Advantage plan or to Original Medicare during the Medicare Advantage open enrollment period, which runs from January 1 to March 31.

Medicare Advantage in Texas

Medicare Advantage plans are available in all 254 counties in Texas in 2023, but plan availability ranges from as few as nine plans in some of the state’s service areas to as many as 122 plans for sale in Harris County.

A little more than a third of Texas Medicare beneficiares — just slightly more than the national average — were enrolled in private Medicare plans in 2018. These were mostly Medicare Advantage plans, but some residents in Texas have Medicare Cost plans, which are another form of private coverage. By late 2022, however, the share of Texas Medicare beneficiaries enrolled in private plans had grown to more than 49%. The other 51% of Medicare beneficiaries in Texas were enrolled in Original Medicare instead.

Between late 2019 and early 2022, UnitedHealth Group saw a 157% increase in Medicare Advantage enrollment in Texas. With 867,130 Californians enrolled in its MA plans in February 2022, the carrier had the highest market share – 46% – out of a field of 25 carriers selling MA plans in the state.

Medigap in Texas

More than half of Original Medicare beneficiaries have supplemental coverage provided by an employer-sponsored plan or Medicaid. But for those who don’t, Medigap plans (also known as Medicare supplement plans) are designed to pay some or all of the out-of-pocket costs (deductibles and coinsurance) that enrollees would otherwise have to pay themselves. Since Original Medicare does not include a cap on out-of-pocket costs, most enrollees maintain some form of supplemental coverage, and Medigap plans are one way to do this.

According to an AHIP analysis, there were 918,619 Texas Medicare beneficiaries with Medigap coverage as of 2020.

There are 71 insurers licensed to sell Medigap plans in Texas.

Although Medigap plans are sold by private insurers, the plans are standardized under federal rules. There are ten different plan designs (differentiated by letters, A through N), and the benefits offered by a particular plan (Plan A, Plan F, etc.) are the same from one insurer to another.

Unlike other private Medicare coverage (Medicare Advantage and Medicare Part D plans), there is no annual open enrollment window for Medigap plans. Instead, federal rules provide a one-time six-month window when Medigap coverage is guaranteed-issue. This window starts when a person is at least 65 and enrolled in Medicare Part B (you have to be enrolled in both Part A and Part B to buy a Medigap plan).

Although disabled Americans under the age of 65 are eligible for Medicare, federal rules do not guarantee access to Medigap plans for people who are under 65. But the majority of the states — including Texas — have implemented rules to ensure that disabled Medicare beneficiaries have at least some access to Medigap plans. Texas law requires Medigap insurers to offer at least Medigap Plan A to disabled enrollees under age 65, during the six-month period that begins when they’re enrolled in Medicare Part B. Medigap Plan A is the least comprehensive of the Medigap plans, but it will cover the 20% Part B coinsurance that the enrollee would otherwise have to pay out-of-pocket.

Disabled Medicare beneficiaries under the age of 65 have another six-month Medigap open enrollment period when they turn 65. At that point, they have access to any of the available Medigap plans, at the standard premiums that apply to people who are enrolling in Medicare due to turning 65. (Premiums are generally significantly higher for Medicare beneficiaries under age 65, since their disabilities result in more costly medical care. For example, for a 50-year-old in Houston, Medicare’s plan finder tool shows Plan A premiums that range from $376/month to $1,798/month in 2023. But for a 65-year-old, the same plans range in price from $112/month to $804/month.)

Legislation has been introduced in 2023 in Texas that would require Medigap insurers to offer all of their plans to people under 65, at the same premiums they charge people who are 65. The bill was introduced in late January, but it had not advanced by late February.

Medicare Advantage plans are available to anyone eligible for Medicare, and the rates are not higher for people under age 65. So Texas Medicare beneficiaries under the age of 65 can choose a Medicare Advantage plan instead of Medigap Plan A. Medicare Advantage plans do have a cap on out-of-pocket costs, but they also tend to have limited provider networks, which is an important consideration for people with serious health issues.

Although the Affordable Care Act eliminated pre-existing condition exclusions in most of the private health insurance market, those regulations don’t apply to Medigap plans. Medigap insurers can impose a pre-existing condition waiting period of up to six months, if you didn’t have at least six months of continuous coverage prior to your enrollment. And if you apply for a Medigap plan after your initial enrollment window closes (assuming you aren’t eligible for one of the limited guaranteed-issue rights), the insurer can look back at your medical history in determining whether to accept your application, and at what premium.

Texas Medicare Part D

Original Medicare does not cover the cost of outpatient prescription drugs. As noted above, more than half of Original Medicare beneficiaries have supplemental coverage via an employer-sponsored plan (from a current or former employer or spouse’s employer) or Medicaid, and these plans often include prescription coverage. But Medicare beneficiaries who don’t have drug coverage through Medicaid or an employer-sponsored plan need to obtain Medicare Part D prescription coverage (prior to 2006, some Medigap plans included prescription coverage; people who still have those plans can keep them, but they have not been for sale since the end of 2005).

Part D coverage can be purchased as a stand-alone plan, or as part of a Medicare Advantage plan that includes Part D prescription drug coverage.

In Texas, there are 27 stand-alone Medicare Part D plans for sale for 2023, with premiums that range from about $7 to $108/month.

As of late 2022, there were 1.55 million Medicare beneficiaries in Texas with stand-alone Medicare Part D plans. An additional 1.89 million Texas residents had Medicare Part D coverage integrated with their Medicare Advantage plans. As Medicare Advantage enrollment has grown, the number of people with Part D coverage integrated with Advantage plans has also grown, while the number of people with stand-alone Part D plans (used in conjunction with Original Medicare) has decreased.

Medicare Part D enrollment follows the same schedule as Medicare Advantage. Beneficiaries can enroll in Medicare Part D plans when they’re first eligible for Medicare, and there’s also an annual enrollment window (October 15 to December 7) when people can enroll or switch to a different plan.

Helpful resources for Texas Medicare beneficiaries and their caregivers

Need help with your Medicare application in Texas, or have questions about Medicare eligibility in Texas? These resources provide free assistance and information.

• The Health Information, Counseling, and Advocacy Program (HICAP), with any questions related to Medicare coverage in Texas. Visit the website or call 1-800-252-9240.
  The Texas Department of Insurance has a resources page for Texas residents with Medicare coverage.

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Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org. Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.