Overview of Medicare in Texas
Medicare is the United States federal health insurance program enacted in 1966 to cover hospital (Part A) and medical (Part B) expenses for beneficiaries. Over the years, Medicare has expanded its program to offer even broader coverage, often referred to as Medicare Part C and Medicare Part D coverage. In addition, Medicare coverage is delivered not only by the federal government, but also by private insurance companies that are contracted by Medicare to provide benefits to beneficiaries. With so many connecting parts and providers of coverage, choosing your Medicare coverage may seem a daunting exercise. To help you, we’ve pulled together some facts about the parts of Medicare and how they can work together in Texas to help you evaluate which Medicare coverage options are best for you.
Original Medicare is a federal program offered to individuals when they reach age 65, as well as certain people under 65 with disabilities or certain conditions, such as end-stage renal disease (permanent kidney failure requiring continuous dialysis treatment or a kidney transplant) or Lou Gehrig’s disease (amyotrophic lateral sclerosis). Regardless of your health status or income level, you can get Original Medicare if you are a citizen or permanent, legal resident of the United States for at least five continuous years and meet the requirements for eligibility. The rules for Original Medicare in Texas are the same rules as those across the country. You can get personalized information about your eligibility and enrollment in Original Medicare from your local Social Security Office.
Original Medicare consists of two “parts”:
- Medicare Part A helps pay for inpatient hospital care as well as some post-hospitalization skilled nursing care and home health visits, and hospice care.
- Medicare Part B helps pay for doctor visits related to diagnosis and treatment of an illness or injury; health check-ups and some preventive screenings; outpatient medical services such as physical therapy, lab work and X-rays, durable medical equipment, and some home health services.
You can get Medicare Part A without a premium if you or your spouse worked at least 10 years (40 quarters) and paid Medicare taxes; otherwise, you may owe a premium for your Part A coverage. Most Medicare beneficiaries pay a premium for Part B coverage. Typically you must also pay deductibles, copayments, and/or coinsurance costs for covered Medicare Part A and Part B services.
Original Medicare, Part A and Part B, does not cover all health-care services and health-related items, however. You will be responsible for paying:
- Most prescription drugs (except for medications you receive while in the hospital or certain medications you receive in an outpatient treatment center)
- Custodial long-term services (nursing home care)
- Routine dental care and dentures
- Routine vision care and eyeglasses or contact lenses
- Health services received outside of the country
You can get Medicare Part D prescription drug coverage from a Medicare stand-alone Prescription Drug Plan that works alongside your Original Medicare coverage. Another option is to get Medicare Prescription Drug coverage through a Medicare Advantage plan that includes prescription drug benefits (Medicare Advantage Prescription Drug, or MA-PD).
You must have Medicare Part A and/or Part B to be eligible for Medicare Part D prescription Drug coverage. If you decide to get Medicare prescription drug coverage, you will probably have to pay a monthly premium for your plan. Depending upon your income, you may qualify for “extra help” to offset some or all of your premium cost (also known as the Low-Income Subsidy program). If you are not eligible for cost assistance, your Medicare Part D costs are based on your Medicare plan.
As an alternative way to receive your Original Medicare benefits, you may want to consider Medicare Part C (Medicare Advantage) Private insurance companies contract with the Centers for Medicare & Medicaid Services (CMS) to provide all Original Medicare, Part A and Part B, benefits (except hospice care, which continues to be paid by Medicare Part A). These are called Medicare Advantage plans. If you enroll in a Medicare Advantage plan, then the plan will provide benefits and pays for covered services you receive.
Medicare Advantage plans may provide you more coverage than Original Medicare offers. Many Medicare Advantage plans include additional benefits, including routine dental and vision care, hearing, wellness programs, and prescription drug coverage. Medicare Advantage plans that include prescription drug coverage are known as Medicare Advantage Prescription Drug (MA-PD) plans; these plans give you the convenience of having all of your Medicare medical and prescription drug benefits through one plan.
Medicare Advantage plans limit beneficiaries’ out-of-pocket spending for services covered under Medicare Parts A and B. All Medicare Advantage plans must include an annual out-of-pocket spending limit; once your out-of-pocket costs reach this limit (including the deductible), your Medicare Advantage plan pays 100% of covered health-care costs for the remainder of the year. As noted earlier, Original Medicare, in contrast, doesn’t have a maximum spending limit to cap your annual out-of-pocket costs. Keep in mind that generally, Medicare Advantage members must continue to pay their Medicare Part B premium.
Medicare Advantage plans come in various types. The most common types are Health Maintenance Organizations (HMOs) and Preferred Provider Organizations (PPOs**). HMOs and PPOs have networks of participating hospitals, doctors, and other health-care professionals.
If you select a Medicare Advantage HMO, you will most likely choose a primary care physician who provides or coordinates your care through referral to other participating providers. Except for emergencies, in general out-of-network providers’ services are not covered unless approved in advance by the Medicare Advantage plan.
If you select a Medicare PPO, your out-of-pocket costs are lower when you use hospitals, doctors, and other health-care professionals who participate in the PPO’s network than when you use non-participating health-care providers.
Therefore, if you are interested in joining a Medicare Advantage HMO or PPO plan and you want to maintain your existing relationships with doctors and/or hospitals, check to see if your preferred health-care providers are participating in the Medicare Advantage plan’s network.
To enroll into a Medicare Advantage plan, you must be enrolled in Medicare Part A and Part B, and live in the Medicare Advantage plan’s service area. With some exceptions, you cannot have end-stage renal disease and have a Medicare Advantage plan. You need to continue paying your Medicare Part B premium to Medicare, and pay the Medicare Advantage plan premium, if any, directly to your plan.
To find out more about the cost and benefits of Medicare plan options where you live, visit the eHealth plan finder on this webpage, and enter your home zip code.
Medicare resources in Texas
Texas Department of Insurance – This office offers many services to Texas Medicare beneficiaries, from counseling and education to finding financial assistance for health care costs. This is also where the Health Information Counseling and Advocacy Program (HICAP) is located. HICAP offers statewide counseling and information about various insurance coverage options, including Medicare plans. The department’s website also offers eligibility requirements for those who may qualify for additional financial assistance from the state.
Texas Health and Human Services Commission – This state office is the go-to place for beneficiaries who qualify for Medicaid and Medicare Savings programs like the Qualified Medicare Beneficiary Program. These programs provide financial assistance to eligible beneficiaries who meet certain income requirements. Assistance may include partial or full payment for Medicare premiums, deductibles and coinsurance costs. The website for the Texas Health and Human Services Commission provides information about these eligibility requirements and contact information.
Medicare statistical trends in Texas
In 2018, approximately 3.9 million Texans received Medicare coverage. Take a look at these figures published by the Centers for Medicare & Medicaid Services:
- 2,390,611 Texas beneficiaries enrolled in Medicare Part A and/or Part B
- 1,552,275 Texas beneficiaries enrolled in a Medicare Advantage plan or other health plan
- Of the 2,865,481 people who chose Medicare Part D coverage, more than 1.6 million beneficiaries enrolled in a stand-alone Medicare Prescription Drug Plan, while almost 1.2 people opted to get their Medicare prescription drug coverage from a Medicare Advantage plan that bundled medical and prescription drug coverage in their benefit offering.
As a Texan and Medicare beneficiary (or soon-to-be one), perhaps you are wondering how much freedom of choice you have to match your Medicare coverage with your health-care needs today and in the future. The opportunities look bright in your home state. In 2018* –
- 177 Medicare Advantage plans are available statewide and offer a variety of benefit designs, premiums, and cost-sharing structures.
- 100% of Texas Medicare beneficiaries have access to a Medicare Advantage plan.
- 24 Medicare Prescription Drug Plans are available, and for those Medicare beneficiaries who had Part D prescription coverage in the past, 84% have access to a plan with a lower premium than they paid in 2017.
- 32% of people with Medicare Part D receive Extra Help (also called the Low-Income Subsidy, or LIS) to help pay for their Part D coverage.