Health insurance in Texas
- Texas utilizes the federally run marketplace at HealthCare.gov.
- Open enrollment for 2021 health plans ended on December 15, 2020.
- Enrollment grew for 2020, with more than 1.1 million people selecting plans during open enrollment.
- Short-term health plans are available in Texas with initial plan terms up to 364 days (the state defaults to the federal rules).
- Ten insurers will offer plans in the Texas exchange for 2021, up from eight in 2020.
- Texas continues to refuse to accept the ACA’s Medicaid expansion.
This page is dedicated to helping consumers quickly find health insurance resources in the state of Texas. Here, you’ll find information about the many types of health insurance coverage available. You can find the basics of the Texas health insurance marketplace and upcoming open enrollment period; a brief overview of Medicaid expansion in Texas; a quick look at short-term health insurance availability in the state; statistics about state-specific Medicare rules; as well as a collection of Texas health insurance resources for residents.
The Texas health insurance marketplace
Texas utilizes the federally run marketplace (exchange) at HealthCare.gov and has one of the highest exchange enrollments in the country. Only Florida and California have higher exchange enrollment.
The insurance marketplace offers health insurance plans for individuals and families who need to buy their own health insurance. This includes early retirees (who will transition to Medicare when they turn 65), self-employed residents, and people employed by a small business that doesn’t offer employer-sponsored health benefits.
Using the marketplace is optional; individuals and families in Texas can choose instead to buy coverage directly from a health insurance company. But the marketplace is the only place where Texas residents can qualify for financial assistance benefits based on their household income. This includes premium subsidies (which offset the monthly cost of coverage) and cost-sharing reductions (which reduce out-of-pocket medical costs — deductibles, coinsurance, and copays).
Eight health insurance companies offer health plans in the Texas exchange in 2020. This will grow to ten in 2021, with the addition of Friday Health Plans and Scott & White Health Plan, both of which have made the business decision to start offering coverage in the Texas marketplace. Proposed rate changes for 2021 range from a slight decrease to a double-digit increase, depending on the insurance company.
Read our overview of the Texas health insurance marketplace – including news updates and exchange history.
Texas open enrollment period and dates
Open enrollment for 2021 health plans started on November 1 and ended on December 15, 2020. This annual window allows new applicants to apply for health coverage, and gives existing enrollees an opportunity to renew or change their coverage for the coming year, and to update their financial information with the exchange, so that their financial assistance for the coming year will be accurate.
Outside of the open enrollment period, Texas residents can only enroll in individual major medical health coverage if they experience a qualifying event. If a person submits an application or requests a plan change outside of the open enrollment window, health insurance companies require proof of the qualifying event, regardless of whether the application is being submitted on-exchange or directly through the insurance company.
Read our overview of the Texas health insurance marketplace.
Texas enrollment in qualified health plans
During the open enrollment period for 2020 coverage, 1,116,293 Texas residents signed up for private individual market plans in the Texas health insurance marketplace. Texas was one of only a handful of HealthCare.gov states where enrollment grew in 2020.
Read more about yearly enrollment totals in the Texas health insurance marketplace.
Medicaid expansion in Texas
The ACA would have expanded Medicaid to cover all legal residents in Texas with incomes up to 138 percent of the federal poverty level, but a Supreme Court ruling in 2012 allowed states to opt out of Medicaid expansion. Texas remains among the dwindling minority of states that have continued to reject the expansion of Medicaid.
Because of the state’s refusal to expand Medicaid, 761,000 Texans are in the coverage gap, with no access to financial assistance with their health insurance. This is far more than any other state that has not expanded Medicaid – the next highest is Florida, with about 391,000 people.
Between 2013 and March 2017, Texas’ existing Medicaid/CHIP program saw an increase of about 13 percent, despite the very strict eligibility guidelines that the state uses. By 2019, enrollment had actually dropped to below where it had been in 2013. But by May 2020, total enrollment in Texas Medicaid/CHIP was up to 4 percent higher than it had been in 2013. The COVID pandemic has been driving Medicaid enrollment higher across the country, due to the widespread job losses and income reductions. This is true even in states like Texas that have not expanded Medicaid under the ACA.
Medicaid eligibility rules in Texas are particularly strict: Non-disabled adults without dependent children are ineligible regardless of income, and parents with dependent children are only eligible if their household income doesn’t exceed 15 percent of poverty (less than about $3,200 annually for a family of three).
Read more about Medicaid in Texas.
Short-term health insurance in Texas
Texas regulations regarding the definition and duration of short-term health plans align with new federal short-term rules. As a result, plans in Texas short-term health insurance can have initial terms of up to 364 days and can be renewed for a total duration of 36 months.
Read more about short-term health insurance in Texas.
Obamacare in Texas
In 2010, Texas’s U.S. Senators John Cornyn and Kay Hutchison, Republicans, both voted no on the ACA. In the U.S. House, 20 Republican representatives from Texas voted no, while 12 Democrats voted yes. Ted Cruz has since replaced Hutchison in the Senate, and is one of the country’s most outspoken opponents of the ACA.
Former Texas Gov. Rick Perry was also staunchly opposed to the ACA and had a state legislature with a strong Republican majority. The state opted to let HHS run the exchange, has refused to expand Medicaid, and even worked to make it more difficult for navigators to do their job in Texas.
In January 2015, Greg Abbott took office as Texas’ governor. He has voiced his opposition to expanding the current Medicaid system. However, he would like to see Texas use federal Medicaid funds in the form of block grants.
Has the ACA helped Texans?
Before the ACA was implemented, according to U.S. Census data, Texas had the highest uninsured rate in the country in 2013 (22.1 percent). It’s gone down since then, but Texas still had the highest uninsured rate in 2018, at 17.7 percent.
Texas leaders have been vocally opposed to the ACA, and the state has thus far refused to expand Medicaid, so a cornerstone of the law’s ability to reduce the uninsured rate is unavailable in Texas.
But more than a million Texans are enrolled in private health plans through the exchange, and 92 percent of them are receiving premium subsidies that average $468/month and make their monthly health insurance premiums more affordable. And 60 percent of them are receiving cost-sharing reductions, which make their out-of-pocket healthcare expenses (deductible, copays, coinsurance) less costly.
Medicare coverage and enrollment in Texas
There were nearly 4.3 million Texas residents enrolled in Medicare as of August 2020. That’s about 14 percent of the state’s population, versus nearly 19 percent of the U.S. population enrolled in Medicare. Most of the state’s Medicare beneficiaries are eligible for the coverage due to their age (at least 65), but 15 percent are under the age of 65 and eligible for Medicare because of a disability.
More than 2.4 million Texas residents are enrolled in Original Medicare (Part A, hospital coverage, and Part B, outpatient coverage), while more than 1.8 million are enrolled in private Medicare Advantage plans. The number of Medicare Advantage members has been growing faster than overall growth in Medicare enrollment (the number of Texas Medicare beneficiaries enrolled in Original Medicare has fallen over the past year, despite the fact that total enrollment in Medicare has grown by more than 84,000 people).
You can read more about Medicare in Texas, including details about the state’s rule for Medigap plans, as well as the availability of optional Medicare Advantage and Medicare Part D prescription drug plans.
Texas health insurance resources
- Texas Department of Insurance — Oversees, regulates, and licenses the health insurance companies that provide coverage in the state, as well as the agents and brokers who sell the policies.
- Texas Health Information, Counseling and Advocacy Program — A resource for Medicare beneficiaries and their caregivers; can answer questions about a wide range of Medicare issues.
- Change Happens Healthcare Navigators — This is the federally-funded Navigator organization in Texas (the business office is located in Houston, but the Navigators can provide assistance, answer questions, and help with enrollments statewide).
- Medicare Rights Center — A nationwide resource for Medicare beneficiaries.
State-based health reform legislation
Texas only has legislative sessions in odd-numbered years. This resource, published by the Texas Department of Insurance, details bills related to health reform that were enacted in Texas in the 2017 legislative session.
- SB1742, enacted in 2019, requires health plan provider directories to make it clear whether specialists practicing at in-network facilities are also in-network. In addition, the legislation imposes new rules related to prior authorization, including a readily available list of services that are subject to prior authorization requirements, and information about the insurer’s total volume of prior authorization requirements and denials.
- SB1264 protects Texans enrolled in state-regulated health plans (ie, plans that aren’t self-insured) from surprise balance billing. It applies to medical services received on or after January 1, 2020, and essentially requires the insurer and the out-of-network provider to work out the payment arrangements without involving the patient. Surprise balance billing refers to situations in which emergency care is provided at an out-of-network facility, or when a patient goes to an in-network facility but is treated — often unknowingly — by a medical provider who isn’t part of the patient’s insurance network. Instead of billing the patient for amounts above their normal cost-sharing requirements, the out-of-network provider has to use a state-regulated mediation/arbitration process to work out a payment amount with the patient’s insurer.
- SB1037, enacted in 2019, ensures that surprise balance bills that are sent to collections won’t show up on the person’s credit report.
- HB214, enacted in 2017, prohibits coverage for elective abortion on all major medical plans (including plans sold through the exchange) in Texas. Twenty-five states had already enacted similar legislation.
- SB1406, enacted in 2017, authorized the state to submit a 1332 waiver proposal to the federal government, seeking permission to waive the actuarial value requirements that currently apply in the small group health insurance market. The idea is to allow small group plans to have a wider range of actuarial values, instead of having to conform to the current bronze, silver, gold, or platinum categories. The legislation was signed into law in May 2017, but the state never submitted a 1332 waiver proposal. The Texas Department of Insurance published a brief in early 2018 detailing several other potential 1332 waiver proposals that could be used to stabilize the individual market, but related legislation was not enacted in 2019.
Scroll to the bottom of this page for a summary of other recent Texas bills related to healthcare reform.
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.