Health insurance in Texas
- Texas utilizes the federally run marketplace at HealthCare.gov.
- Open enrollment for 2019 coverage in Texas ended on December 15, but enrollment is still possible for Texans with qualifying events.
- Short-term health plans are available in Texas with initial plan terms up to 364 days.
- Eight insurers are offering plans through the Texas exchange. Three are selling off-exchange.
- The average rate increase for 2019 is modest.
- About 1.13 million Texans enrolled in 2018 coverage through the state exchange.
- Texas continues to refuse to accept the ACA’s Medicaid expansion.
- Texas defaults to new federal rules for short-term coverage.
The Texas health marketplace
Texas utilizes the federally run marketplace at HealthCare.gov and has one of the highest exchange enrollments in the country. (The state has a very large population , many of whom were uninsured prior to implementation of the Affordable Care Act.) Only Florida and California have higher exchange enrollment.
Open enrollment for 2019 coverage in Texas ended on December 15, 2018, but enrollment is still possible for Texans with qualifying events.
Rates and carriers for 2019 Obamacare plans
All eight insurers that offer plans in the Texas exchange in 2018 plan to do so in 2019 as well. Their average rate changes are as follows:
- Celtic/Ambetter: 4.7 percent increase
- Blue Cross Blue Shield of Texas: 6.5 percent decrease
- CHRISTUS: 9.6 percent increase (23,000 members)
- Molina: 7 percent increase (236,564 members) [Note that there is an additional note in the Molina filing that indicates the average proposed rate increase is 9.4 percent]
- Oscar: 17 percent increase. Oscar is expanding its coverage area in Texas in 2019. They currently offer plans in San Antonio and Austin, plus off-exchange plans in Dallas. But they’ve filed plans to expand into El Paso and the Dallas/Forth Worth area for 2019.
- Sendero: 33.8 percent increase (25,000 members in eight counties in Central Texas)
- SHA/FirstCare: 19.9 percent (17,000 members)
- Community Health Choice: 8.46 percent
In addition, Scott & White, Insurance Company of Scott & White, and Vista Health Plan all offer off-exchange-only plans, and will continue to do so in 2019.
At ACA Signups, Charles Gaba has calculated an average proposed rate increase of 3.7 percent for 2019, but notes that overall average rates would be decreasing in the state if the individual mandate penalty wasn’t being eliminated, and if the Trump Administration hadn’t finalized rules that expand access to short-term health insurance plans and association health plans — both of which will serve to draw healthy people away from the ACA-compliant market, leaving a sicker risk pool and increasing premiums.
Texas enrollment in qualified health plans
Texas went into the 2014 open enrollment with a much larger uninsured population and pool of potential exchange enrollees than most states. In November 2013, the Kaiser Family Foundation estimated that 3,143,000 Texas residents were potential exchange customers, and that 2,049,000 of them would qualify for premium subsidies.
By mid-April 2014, when the first open enrollment period ended, 733,757 Texans had finalized their enrollment in qualified health plans through the exchange, and HHS reported that 84 percent of them had their premiums reduced with subsidies.
At the end of 2016 open enrollment, more than 1.3 million Texans had selected a qualified health insurance plan through HealthCare.gov. At the end of the first quarter of 2016, effectuated enrollment was 13 percent higher than it was in 2015. Marketing efforts by the Texas Hospital Association have been given credit for this improvement.
Enrollment declined slightly in 2017, but there were still 1,227,290 enrollees in private plans through the Texas exchange by January 31, 2017.
For 2018 coverage, 1,126,838 people enrolled in coverage through the Texas exchange during open enrollment – about an 8 percent decrease from the previous year. Effectuated enrollment in private plans in the Texas exchange as of February 2018 stood at just over a million people, and 90 percent of those enrollees were receiving premium subsidies to make their health insurance more affordable.
Read more about the Texas health insurance marketplace.
Medicaid and CHIP 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. As stated above, Texas remains among the states who declined to expand Medicaid under the healthcare reform law.
Texas is currently one of 19 states that has not yet expanded Medicaid and has no pending plans to do so. Researchers at New York University estimate that if the state has still not expanded Medicaid by 2022, Texas will be forfeiting $9.6 billion in federal funds that year. (The state’s portion of Medicaid expansion in 2022 would be just $1.2 billion – federal funding for Medicaid expansion will always cover at least 90 percent of the cost of covering people newly eligible based on Medicaid expansion.)
Because the state refused to expand Medicaid, 638,000 Texans were in the coverage gap (as of 2016) with no access to financial assistance with their health insurance. This was far more than any other state that has not expanded Medicaid – the next highest was Florida, with about 467,000 people.
These residents would be eligible for Medicaid if the state were to accept federal funds to expand coverage. But for now, there is no financial assistance available for people with incomes below the poverty level who do not qualify for Medicaid under the state’s existing stringent guidelines.
Between 2013 and March 2017, Texas’ existing Medicaid/CHIP program saw an increase of about 7 percent, despite the very strict eligibility guidelines that the state uses: 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 $3,000 annually for a family of three). Medicaid and CHIP enrollment is open year-round.
Read more about Medicaid expansion 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 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.
Texas health ratings
The Lone Star state continues to founder in national healthcare rankings across the board. Though seeing slight improvements, the state’s large population of uninsured surely impacts its performance in many health dimensions.
In 2015, The Commonwealth Fund’s Scorecard on State Health System Performance ranked Texas 40th out of the 50 states and the District of Columbia, consistent with its 2014 ranking. In 2018, the state dropped to 44th place, and dropped again, to 49th place, in the 2019 analysis.
The Lone Star state came in last for the Access & Affordability metric, at 51st place. The only metric in which Texas scored in the upper half of states was Healthy Lives; within that metric, Texas ranked in the top quartile for three measures: The prevalence of smoking, the prevalence of suicide, alcohol, and drug-related deaths, and the prevalence of adults who had lost six or more teeth.
America’s Health Rankings, however, gives Texas better marks. The state is still in the bottom half in the Rankings, but it came in 34th on the 2017 Ranking, down one spot from 33rd overall in 2016. For many years, the state has placed poorly in Policy measures, repeatedly ranking 50th for its high percentage of uninsured.
Trust for America’s Health provides another look at overall public health in Texas in their 2016 listing of Key Health Data About Texas, which includes information on specific diseases and health outcome predictors. Since the 2009 report, Texas has ranked No. 1 for the number of uninsured adults. However, in that time, the percentage of uninsured adults has dropped from 24.5 to 19.1. The state ranks second for the number of children under age 18 who are uninsured (11 percent).
The Robert Wood Johnson Foundation has also compiled health factors and outcomes data in Texas on a county level. The state’s uninsured population is as low as 16 percent in its best-performing county for this health factor and as high as 39 percent in its worst-performing county. You can use this interactive map to see how the counties in Texas compare with one another.
Obamacare in the Lone Star State
In 2010, Texas’s U.S. Sens., 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 has 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, but the Obama Administration opposed that possibility with other governors. It’s much more likely that the Trump Administration would approve, although a lot is up in the air in terms of the future of the ACA under the Trump Administration and a Republican Congress.
Various GOP repeal efforts failed in 2017, but the GOP tax bill, enacted in December 2017, did include repeal of the ACA’s individual mandate. (People who are uninsured in 2018 will have to pay a penalty when they file their taxes in early 2019, but the penalty will not apply to people who are uninsured starting in 2019).
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 2016, at 16.6 percent.
According to Kaiser Family Foundation data, 10 percent of Texas children were uninsured in 2016. Only Utah, Arizona, and Alaska had a higher percentage of their children without health insurance. There are a variety of organizations in Texas working to reach more families who may be eligible to apply for the state’s Medicaid and Children’s Health Insurance Program, but the state’s uninsured rate for children remains double the national average.
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. In 2016, of the 2.2 million people who were in the coverage gap in states that have refused Medicaid expansion, Texas had by far the largest share, with 638,000 people unable to realistically access any health coverage at all.
But the uninsured rate in Texas is higher than any other state. According to U.S. Census data, 16.6 percent of Texas residents were uninsured in 2016 – more than double the national average of 8.6 percent. The state’s refusal to accept federal funding to expand Medicaid is a big part of the reason so many people remain uninsured.
Lawmakers approve a temporary high-risk pool, pending new federal funding and ACA repeal
In May 2017, lawmakers in Texas overwhelmingly approved S.B.2087, and Governor Greg Abbott signed it into law the following month. The bill allows Texas to create a temporary high-risk pool if and when federal funds become available, although the legislation expires in August 2019.
The text of the legislation specifically prevents the state from using the pool to expand Medicaid. But the pool could be used to either directly insure people with pre-existing conditions in coverage separate from the private individual market, or to offset costs for private insurers so that people with pre-existing conditions could still obtain affordable private health insurance.
Republicans in Congress spent much of 2017 trying unsuccessfully to repeal and replace the ACA. The American Health Care Act (AHCA) – which passed the House but failed in the Senate – included $138 billion in new federal funding for various programs that could be used to stabilize health insurance markets and/or reduce premiums and increase benefits.
Some of this money could have been used to fund high-risk pools, but nothing will happen under S.B.2087 if federal funding doesn’t become available. So for the time being, the legislation is dormant. Texas has no need for a high risk pool at this point, as the ACA itself remains intact and private health insurance plans must continue to comply with the law’s requirement that coverage be guaranteed issue, regardless of applicants’ medical histories.
It’s noteworthy that health policy experts have generally said that the money provided by the AHCA would not have been sufficient to create functional high-risk pools or otherwise adequately ensure that people with pre-existing conditions could obtain high-quality, affordable health insurance in the individual market if the AHCA had been enacted. But Texas is prepared for the eventuality of creating a new high-risk pool, if federal funding were to become available and portions of the ACA requiring coverage to be guaranteed issue were to be repealed.
High-risk pools used to be the default last resort coverage option in most states when people couldn’t get private insurance as a result of their medical history. Texas had a high-risk pool (the Texas Health Insurance Pool), but coverage through the pool terminated in March 2014, as medical history was no longer an obstacle to obtaining health insurance in the private market under the ACA.
Medicare in the state of Texas
Of these enrollees, 84 percent qualify based on age and 16 percent qualify based on disability. The state spends about $10,549 annually per recipient – 18 percent more than the national average of $8,970 per recipient.
Texans who qualify for Medicare can select Medicare Advantage plans instead of Original Medicare as a way to gain more health benefits. In 2015, about 31 percent of Texas Medicare recipients selected a Medicare Advantage plan instead of traditional Medicare, consistent with the national average
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 will end surprise balance billing for Texans enrolled in state-regulated health plans (ie, plans that aren’t self-insured). 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.
- SB2087, enacted in 2017, authorized the state to reestablish a high-risk pool (Texas had a high-risk pool pre-ACA, but it was eliminated once health insurance became guaranteed-issue in the individual market), if and when federal funding becomes available. This legislation passed in May 2017, when it was still unclear whether Congressional efforts to repeal the ACA would be successful. They were not, but some of the bills that were under consideration at that point included provisions for at least some federal funding for state-run high-risk pools. SB2087 allows the state to seek federal funding for a high-risk pool, but legislation to provide such funding is no longer under consideration at the federal level. Texas enacted similar legislation (SB1940) in 2019, again authorizing the state to seek federal funding for a high-risk pool if such funding were to become available.
- 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.