Medicare in Texas

Medicare Advantage plans are available in all 254 counties in Texas in 2023, but plan availability ranges from as few as six plans in some of the state’s service areas to as many as 77 plans for sale in Harris County.³

Thirty-eight percent of Texas Medicare beneficiaries¹⁶ — just slightly more than the national average (about 35%)¹⁷ — were enrolled in Medicare Advantage plans in 2018. These were mostly Medicare Advantage plans, but some residents in Texas have Medicare Cost plans. By mid-2023, however, the share of Texas Medicare beneficiaries enrolled in Medicare Advantage plans had grown to 52%. The other 48% of Medicare beneficiaries in Texas were enrolled in Original Medicare instead.¹

More than half of Original Medicare beneficiaries have supplemental coverage provided by an employer-sponsored plan or Medicaid.¹⁸ But for those who don’t, Medigap plans (also known as Medicare supplement insurance plans) are designed to pay some or all of the out-of-pocket costs (deductibles, copays 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 America’s Health Insurance Plans (AHIP) analysis, there were 931,380 Texas Medicare beneficiaries with Medigap coverage as of 2021.⁵

There are 55 insurers licensed to sell Medigap plans in Texas.⁴

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 Medicare plan coverage (Medicare Advantage and Medicare Part D prescription drug 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 Medigap Plan A premiums that range from $327/month to $1,964/month in 2023. But for a 65-year-old, the same plans range in price from $103/month to $930/month.)⁷

Legislation was introduced in 2023 in Texas that would have required Medigap insurers to offer all of their plans to people under 65, at the same premiums they charge people who are 65. The bill passed in the Texas House in May 2023, but did not advance in the Senate.

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.

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 prescription drug coverage through Medicaid or an employer-sponsored plan need to obtain Medicare Part D prescription drug coverage (prior to 2006, some Medigap plans included prescription coverage; people who still have those plans can keep them, but they have not been available 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 prescription drug plans for 2023, with premiums starting at $6.60.⁸

As of mid-2023, there were about 1.5 million Medicare beneficiaries in Texas with stand-alone Medicare Part D prescription drug plans. More than 2 million Texas residents had Medicare Part D prescription drug coverage integrated with their Medicare Advantage plans.¹ As Medicare Advantage enrollment has grown, the number of people with Medicare Part D prescription drug coverage integrated with Medicare Advantage plans has also grown, while the number of people with stand-alone Medicare  Part D prescription drug plans (used in conjunction with Original Medicare) has decreased.

Medicare Part D prescription drug plan enrollment follows the same schedule as Medicare Advantage plan enrollment. Beneficiaries can enroll in Medicare Part D prescription drug 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 Medicare Part D prescription drug plan.

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.

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.