Medicare in Texas

Medicare is a free and low-cost health insurance program operated by the federal government. It’s available to adults aged 65 and over and those with qualifying medical conditions. As of 2023, Texas has an estimated population of 30,029,572. Of this number, 13.4% are seniors and eligible. At 2,382,668, 52% of individuals who qualify for Medicare in Texas are enrolled, which is a 7% increase from the previous year. While the overall percentage of Medicare enrollees in Texas is higher than the national average of 48%, growth from 2022 to 2023 is aligned at 7%.

There are two ways to access Medicare; via Original Medicare (including Part A and Part B) or Medicare Advantage (Part C). Most people are automatically enrolled in Part A and don’t pay a premium if they (or their spouse) paid taxes long enough — typically at least 10 years. Texans who aren’t eligible for premium-free Part A must sign up for Medicare during their initial enrollment period or face a lifetime penalty fine which increases for every year they don’t enroll. Part A covers inpatient hospital stays, skilled nursing, home health care and hospice care. Part B includes medical supplies, lab tests and outpatient care, and has a premium starting at $164.90 per month for 2023.

With Original Medicare, beneficiaries pay for services as they access them, and Medicare takes on some costs. Seniors can add Part D, which is the Medicare prescription drug benefit, or they can buy a Medigap plan that provides supplemental coverage to reduce out-of-pocket costs. The other option is Medicare Advantage, which combines the benefits of Parts A and B into a single monthly premium offered by private Texas-based insurance companies. Policies typically include extra coverage for dental care, vision and hearing services, plus a prescription medication component. Moreover, they tend to have annual out-of-pocket limits. The number of Medicare Advantage providers is rising steadily, allowing seniors in Texas to choose from more than 75 plans. 

This guide provides vital information about Medicare in Texas, helping older adults access essential resources and get personalized coverage with maximum benefits and minimal costs.

Options for Medicare Coverage in Texas

Most of the seniors who qualify for Medicare coverage opt to participate in one of two ways, Original Medicare or Medicare Advantage. Seniors in Texas have a choice in how to build their coverage to best meet their unique health care needs. In addition to the central Medicare benefit offered by the federal government, there are also private plans and supplemental plans to choose from.

Original Medicare (Parts A & B)

Original Medicare provides sufficient coverage for many older adults in Texas and is often the most popular plan utilized. However, it doesn’t suit everyone’s needs. Luckily, Medicare-eligible seniors can tailor a policy to suit their unique situation and health requirements. In addition to policies provided by the federal government, beneficiaries can choose supplemental plans or Medicare Advantage Plans from private insurers.

Who Should Consider Original Medicare

Original Medicare may be a good option for those who:

• Travel frequently within the United States
• Don’t need extra benefits such as home-delivered meals and coverage for over-the-counter medication
• Want to choose their own prescription drug coverage

Medicare Advantage (Part C)

Medicare Advantage, also known as Part C, offers seniors in Texas the same benefits as Original Medicare, except hospice care, which is exclusive to Part A. Part C is operated by private insurance companies and typically has annual out-of-pocket limits.

To enroll in Medicare Advantage, you must already be enrolled in Part A and Part B, and can’t be enrolled in Medigap. There are four types of plans: preferred provider organization (PPO), health maintenance organization (HMO), private fee-for-service (PFFS), and special needs plan (SNP). Each option has varying costs and levels of flexibility, with some requiring referrals for specialist treatments.

Who Should Consider Medicare Advantage 

Medicare Advantage can be a good choice for seniors who: 

• Need to limit out-of-pocket expenses 
• Prefer additional benefits such as prescription drug coverage and dental care 
• Are generally healthy so may benefit from lower premiums
• Would like to have a managed care plan 

The Top 10 Medicare Advantage Plans in Texas

Seniors in Texas can choose between a large number of highly rated Medicare Advantage plans. The table below lists some of the top Medicare Advantage providers, judged by the number of currently enrolled participants. It includes the range of prices across plans that are current as of August of 2023. More information on Medicare Part C plans is available on the Medicare Advantage Plans in Texas page. 

Medicare Prescription Drug Coverage (Part D)

Original Medicare doesn’t pay for most prescription drugs through Part A or B coverage. Instead, seniors purchase separate prescription drug policies, also called Part D coverage. Medicare contracts with private health insurance companies to provide this coverage. There are multiple plans to choose from with varying monthly premiums, which beneficiaries pay in addition to their Original Medicare premiums. While seniors don’t have to purchase prescription drug coverage when they’re first eligible for Medicare, not obtaining this coverage at this time may result in late enrollment penalties they pay for as long as they have Medicare if they enroll later.

Each prescription drug plan has its own formulary, or list of covered drugs. Formularies are typically split up into tiers. The tier a medication is in determines how much the insurance company pays and how much the beneficiary pays for it. Lower-level tiers are usually made up of generic and low-cost brand name drugs, while higher tiers are composed of more expensive brand name and specialty drugs. In most cases, the lower the tier, the lower the policyholder’s cost-sharing responsibility.

Who Should Consider Medicare Prescription Drug Coverage

Seniors who may benefit from prescription drug coverage include those who:

• Currently take prescription medication or expect to in the future
• Want to avoid late enrollment penalties
• Want to reduce out-of-pocket prescription drug expenses

Medicare Supplement Insurance (Medigap)

While Original Medicare provides coverage for many medical costs, seniors may still have significant out-of-pocket expenses. These may include copays, coinsurance and deductibles. Seniors may be able to reduce their cost-sharing obligations by purchasing a Medigap plan. These plans can only be used with Original Medicare. It’s illegal for private insurance companies to sell Medigap plans to those with Medicare Advantage plans.

For more information on Medigap plans, seniors can refer to the Best Medicare Supplement Companies of 2023 page.

Who Should Consider Medicare Supplement Insurance

Good candidates for Medigap may be those who:

• Have ongoing health issues and expenses
• Travel overseas often
• Want to access an expanded network of health care providers
• Expect to need health services not covered by Original Medicare

Medicare Resources in Texas

It can be a challenge to navigate the complex environment of Medicare options in Texas. Fortunately, seniors in the Lone Star State have access to several programs and agencies that can help them find the best care for their needs. Through these resources, Medicare beneficiaries can get advice, referrals and one-on-one assistance with finding and applying for Original Medicare, Medicare Advantage, Medigap and prescription drug coverage.