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Medicare in Texas

Texas requires Medigap insurers to offer at least Plan A to disabled beneficiaries under the age of 65

Key takeaways

  • Nearly 4.3 million people in Texas have Medicare plans, but that’s only a little more than 14 percent of the state’s population.
  • Nearly 43% Texas Medicare beneficiaries had Medicare Advantage plans (or other private Medicare plans, including Medicare Cost plans) as of 2020; Medicare Advantage plan availability ranges from eight plans to 60 plans, depending on the county.
  • In Texas, 70 insurers offer Medigap plans and more than 873,000 Texas residents are enrolled in Medigap plans. Medigap insurers in Texas are required to offer at least Medigap Plan A to disabled beneficiaries under the age of 65.
  • Premiums for stand-alone Part D prescription plans in Texas range from about $7 to $155 per month for 2021 coverage; 1.65 million Texas Medicare beneficiaries have stand-alone Part D plans, plus 1.54 million with Part D integrated with Medicare Advantage.
  • Per-enrollee Original Medicare spending in Texas is the second-highest in the nation (Louisiana is the only state where average per-beneficiary spending is higher).

Medicare enrollment in Texas

The number of Medicare beneficiaries in Texas stood at 4,292,236 as of October 2020. Only Florida and California have more residents enrolled in Medicare.

But only a little more than 14 percent of Texas residents are enrolled in Medicare, compared with almost 19 percent 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. Fifteen percent of all Medicare beneficiaries in Texas — and nationwide — are under the age of 65.

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 Advantage in Texas

Medicare Advantage plans are available in all 254 counties in Texas in 2021, but plan availability ranges from as few as nine plans some of the state’s service areas to as many as 90 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 2020, however, the share of Texas Medicare beneficiaries enrolled in private plans had grown to more than 43 percent. The other 57 percent of Medicare beneficiaries in Texas were enrolled in Original Medicare instead.

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.

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 873,514 Texas Medicare beneficiaries with Medigap coverage as of 2018.

There are 70 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).

Time to sign up for Medicare?

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 percent Part B coinsurance that the enrollee would othewise 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).

Medicare Advantage plans are available to anyone eligible for Medicare, except people with end-stage renal disease (starting in 2021, this limitation will no longer apply; people with ESRD will be able to enroll in Medicare Advantage plans). So unless they have ESRD, 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 35 stand-alone Medicare Part D plans for sale for 2021, with premiums that range from about $7 to $155/month.

As of late 2020, there were 1.65 million Medicare beneficiaries in Texas with stand-alone Medicare Part D plans. An additional 1.54 million Texas residents had Medicare Part D coverage integrated with their Medicare Advantage plans.

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.

Medicare spending in Texas

In 2018, Original Medicare’s per-beneficiary spending in Texas averaged $11,627, which was 15 percent higher than the $10,096 national average. Texas had the second-highest average per-beneficiary costs in the country; only Louisiana had higher average costs. That’s based on data that were standardized to eliminate regional differences in payment rates, but it did not include costs for Medicare Advantage.

How does Medicaid provide financial assistance to Medicare beneficiaries in Texas?

Many Medicare beneficiaries receive financial assistance through Medicaid with the cost of Medicare premiums and services Medicare doesn’t cover – such as long-term care.

Our guide to financial assistance for Medicare enrollees in Texas includes overviews of these benefits, including Medicare Savings Programs, long-term care coverage, and eligibility guidelines for assistance.

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.

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 Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.

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