Medicare Supplement Plans in Texas: Medigap Basics
Do you want Original Medicare and predictable costs? A Medicare Supplement plan might be your solution.
Medicare Supplement plans, also known as Medigap plans, assist you in paying for some or all of the out-of-pocket costs that you would otherwise have to pay for under Original Medicare (Parts A & B). Unlike a Medicare Advantage plan, with a Medicare Supplement plan you are not limited to specific provider networks—so these plans provide the flexibility of using Original Medicare, plus the coverage of some or all out-of-pocket expenses.
Medigap plans work in combination with Original Medicare and are not stand-alone plans. And because Original Medicare does not include a cap on out-of-pocket costs, many Medicare enrollees have some form of supplemental coverage.
In Texas, according to AHIP analysis, there were 911,802 Texas Medicare beneficiaries (36% of fee-for-service enrollees) with Medicare Supplement coverage in 2019.
What Gaps in Medicare Coverage Are There?
Original Medicare Part A covers some inpatient costs (hospital and skilled nursing facility care), while Medicare Part B covers 80% of outpatient costs (doctor bills and other medical expenses). Some out-of-pocket Part A and B expenses you may face include deductibles, copayments for hospital stays over 60 days, care in a skilled nursing facility after 20 days, a 20% coinsurance for doctor bills, and other medical expenses. The gap in coverage may cost you more than you anticipated.
Private insurance companies licensed by the Texas Department of Insurance are authorized to sell Medigap plans. And all plans are standardized. That means that each plan must include the same benefits offered by another company.
While the benefits must be the same, each company’s premium rates, reputation, member features, and service vary. Once you find the Medigap coverage available in your community, and the plan that’s right for you, you’ll then need to determine which insurance carrier is best for your unique needs. Review your plan options with your local Medicare agent. Call (623) 223-8884 or review your Medicare plan options online.
Caution, Avoid the Part D Late Enrollment Penalty
When you choose a Medicare Supplement plan with Original Medicare, you should also enroll or maintain creditable prescription drug coverage to avoid the Part D late enrollment penalty. If you join a Medigap policy that doesn’t include creditable prescription drug coverage, and you decide to join a Medicare Prescription Drug Plan later, you’ll pay a higher monthly premium than if you joined when you were first eligible.
The penalty added to your Medicare Prescription Drug Plan increases for each month you wait to join a Medicare prescription drug plan. So, the longer you wait, the higher the penalty will become. And in general, it’s a penalty that must be paid for as long as you have a Medicare drug plan.
Learn more about the types of Medicare plans available to you in Texas.
The 10 Types of Medicare Supplement Plans Available in Texas
Because Original Medicare lacks a limit on out-of-pocket medical expenses, a Medicare Supplement plan can ease your worries. In Texas, there are 10 types of Medicare Supplement plans available, lettered A – G and K – N. Each insurance company must offer at least Medigap Plan A but can offer any of the other plans as well. The costs of these plans are determined by the carrier.
As of 2019, the most popular supplement plans in Texas were Plan F, Plan G, Plan N, and Plan J. In 2019, 465,813 of 911,802 Medicare-eligible Texan enrollees were in Plan F (51%), 315,608 enrolled in Plan G (35%), 62,030 enrolled in Plan N (6.8%), and 21,565 enrolled in Plan J (2.4%).
However, as of January 1, 2020, plans that include the Part B deductible were phased out. This means that if you became eligible for Medicare benefits on or after January 1, 2020, you will not be able to enroll in Plan C, Plan F, or Plan J. Beneficiaries that are already enrolled in those plans will be able to keep their coverage. Plan G is the closest you can get to the discontinued Plan F, which is likely why Plan G has the second-highest enrollment of supplement plans in Texas.
When comparing Medicare supplement insurance plans in Texas, it’s important to weigh monthly premium costs with out-of-pocket expenses. Some plans with lower premiums may have higher out-of-pocket costs.
4 Benefits Provided By Medicare Supplement Insurance Plans A – G
Medicare Supplement plans A through G provide basic benefits plus 100% coinsurance coverage of Medicare Part B (Original Medicare), Part A coinsurance or hospice copay paid at 100%, and three pints of blood paid 100% in a benefit calendar year. Depending on the plan letter, additional benefits to choose amongst are coverage of skilled nursing facility coinsurance, Part A deductibles, Part B excess costs, and foreign travel emergencies.
Unlike Plans A through G, Plans K through N each offers varying degrees of benefits. There are no commonalities of the level of coverage between these plans and you should consult a local Medicare agent to discuss which plan option is best for your health and budget. Call (623) 223-8884 or review your Medicare plan options online.
Medicare Supplement Plans A-G in Texas
|Medicare Supplement Plan Benefits in Texas||Medicare Supplement Plans in Texas|
|Part A coinsurance and hospital costs up to an additional 365 days after Medicare benefits are used up (covers 100% of this benefit)||Yes||Yes||Yes||Yes||Yes||Yes|
|Part B coinsurance or copayment (covers 100% of this benefit)||Yes||Yes||Yes||Yes||Yes||Yes|
|First 3 pints of Blood (covers 100% of this benefit)||Yes||Yes||Yes||Yes||Yes||Yes|
|Part A hospice care coinsurance or copayment (covers 100% of this benefit)||Yes||Yes||Yes||Yes||Yes||Yes|
|Skilled nursing facility care coinsurance (covers 100% of this benefit)||No||No||Yes||Yes||Yes||Yes|
|Part A deductible (covers 100% of this benefit)||No||Yes||Yes||Yes||Yes||Yes|
|Part B deductible (covers 100% of this benefit)||No||No||Yes||No||Yes||No|
|Part B excess charge (covers 100% of this benefit)||No||No||No||No||Yes||Yes|
|Foreign travel exchange (up to plan limits)||No||No||80%||80%||80%||80%|
Medicare Supplement Plans K-N in Texas
|Medicare Supplement Plan Benefits in Texas||Medicare Supplement Plans in Texas|
|Part A coinsurance and hospital costs up to an additional 365 days after Medicare benefits are used up (covers 100% of this benefit)||Yes||Yes||Yes||Yes|
|Part B coinsurance or copayment (covers 100% of this benefit)||50%||75%||Yes||Yes|
|First 3 pints of Blood (covers 100% of this benefit)||50%||75%||Yes||Yes|
|Part A hospice care coinsurance or copayment (covers 100% of this benefit)||50%||75%||Yes||Yes|
|Skilled nursing facility care coinsurance (covers 100% of this benefit)||50%||75%||Yes||Yes|
|Part A deductible (covers 100% of this benefit)||50%||75%||Yes||Yes|
|Part B deductible (covers 100% of this benefit)||No||No||No||No|
|Part B excess charge (covers 100% of this benefit)||No||No||No||No|
|Foreign travel exchange (up to plan limits)||No||No||80%||80%|
Medicare Supplement Plan Eligibility & Enrollment in Texas
To qualify for a Medicare Supplement plan policy, you must be enrolled in Medicare Part A and Part B, and you must reside in the state in which you are applying for supplemental coverage. You must also be 65 or older or, in some states, under age 65 due to disability or End-Stage Renal Disease (ESRD).
When to Enroll in a Medicare Supplement Plan in Texas
The best time to enroll in a Medicare Supplement plan in Texas is during your Medigap Open Enrollment Period. That’s because insurance carriers must sell you any plan they offer regardless of your pre-existing medical conditions.
Your Medigap Open Enrollment Period starts the first month you are enrolled in Medicare Part B and you’re older than 65. The enrollment window lasts six months. This period only happens once, and cannot be changed or repeated. If you miss your Medigap Open Enrollment period you may still purchase a Medigap policy, but it may cost more due to past or present health problems.
Most carriers apply the pre-existing clause to newly issued Medicare Supplement plans if you enroll after your Medigap Open Enrollment Period. That’s why it’s essential you purchase a Medigap policy during your Medigap Open Enrollment Period—once you enroll in Part B and you’re older than 65.
You can purchase a Medicare Supplement plan outside of your Medigap Open Enrollment Period, but you may not be able to buy a policy at the same initial rate that you could have received during your Medigap Open Enrollment Period.
When Can You Make A Plan Change Outside of Your Medigap Open Enrollment Period
There is no guarantee that you can enroll in a Medicare Supplement plan outside of your Medigap Open Enrollment Period. That’s because there’s no guarantee that an insurance company will sell it to you— unless you meet certain medical underwriting requirements or situations.
Some of those situations include:
- You have a guaranteed issue right—also called “Medigap protections.”
- A pre-existing condition and are replacing creditable coverage.
- You have End-Stage Renal Disease (ESRD). There are 33 states, including Texas, that require insurance companies to offer at least one kind of Medicare Supplement policy to people with ESRD and Medicare under 65.
As a general rule, insurance companies use medical underwriting to decide whether to accept your application and then, how much to charge for the policy.
Need help deciding which of the Medicare Supplement plan types is best for you?