Comparing Medicare plans in Texas
Medicare Supplement Insurance, commonly known as Medigap, exists to solve a specific mathematical problem: Original Medicare (Part A and Part B) does not cover the entire cost of your healthcare. Original Medicare pays for roughly 80% of approved medical services, leaving you responsible for the remaining 20% coinsurance, alongside a complex series of deductibles and copayments. Crucially, Original Medicare has no annual out-of-pocket maximum. If you face a catastrophic illness or require extended hospitalization, that uncapped 20% exposure can quickly become financially devastating.
Medigap policies are sold by private insurance companies—such as Aetna Medicare, Blue Cross and Blue Shield of Texas, Humana, and UnitedHealthcare—to pay for the costs that Original Medicare leaves behind. You pay a monthly premium to the private insurance carrier, and in exchange, the Medigap policy steps in to pay your deductibles, copayments, and coinsurance after Medicare pays its primary share.
This guide serves as a complete overview of how Medigap functions for Texas residents. It covers the standardized lettered plans, how carriers calculate your monthly premiums, the critical timeline for enrollment, the guaranteed issue rights specific to Texas, and how to logically decide which plan fits your specific healthcare needs and financial situation.
To understand how a Medigap policy works, you must first understand exactly what financial exposure you face under Original Medicare alone. When you enroll in the federal Medicare program, you generally receive two primary pieces of coverage:
While comprehensive, this coverage comes with significant cost-sharing requirements. For example, Medicare Part A operates with a “benefit period” deductible rather than an annual deductible. If you are admitted to the hospital, you must pay a substantial deductible before Part A pays anything. If you are discharged and then readmitted more than 60 days later, you must pay that full hospital deductible all over again. Furthermore, if your hospital stay exceeds 60 days, you face steep daily coinsurance charges.
Medicare Part B carries an annual deductible. Once that deductible is met, Part B typically pays 80% of the Medicare-approved amount for most covered services, leaving you responsible for the remaining 20%. Because there is no cap on this 20%, an expensive surgery, specialized ongoing outpatient therapy, or costly Part B physician-administered medications (like certain chemotherapy infusions) can result in massive bills.
A Medigap policy acts as secondary insurance. It is designed specifically to pay these out-of-pocket costs. When you receive medical care with a Medigap policy, the billing process is generally seamless, handled through an automated system known as “Medicare crossover.”
When your doctor submits a claim to Medicare, Medicare processes the claim and pays its portion (typically 80% for Part B services). Medicare then automatically forwards the claim data directly to your Medigap insurance carrier. The Medigap carrier processes the remaining balance according to the specific rules of the plan letter you purchased (paying the remaining 20%, for instance) and sends the payment directly to your provider.
Because of this automated crossover system, you rarely have to file claims yourself, nor do you have to wait for reimbursement. The system is designed so that the provider bills Medicare, and Medicare communicates with your Medigap carrier to settle the balance.
One of the defining features of Medigap is the total absence of provider networks. Unlike an HMO or PPO, a Medigap policy does not restrict you to a specific list of local doctors or hospitals.
If you hold a Medigap policy, your “network” is simply any healthcare provider in the United States who accepts Original Medicare. You do not need a referral from a primary care physician to see a specialist. If you live in Dallas but want to seek specialized cancer treatment at a facility in Houston, or even across the country at a facility in another state, your Medigap policy will work perfectly, provided the facility accepts Original Medicare. The private insurance carrier issuing your Medigap policy has no say in your medical care; if Medicare approves the claim, the Medigap carrier must pay its designated portion.
The federal government regulates Medigap coverage strictly to protect consumers. In Texas, as in most of the country, Medigap policies are standardized and designated by letters: A, B, C, D, F, G, K, L, M, and N.
Standardization means that the medical benefits of a specific plan letter are identical regardless of which insurance carrier sells it. A Medigap Plan G purchased from Wellpoint covers exactly the same medical costs as a Medigap Plan G purchased from Blue Cross and Blue Shield of Texas. The only differences between policies of the same letter are the monthly premium the carrier charges, the company’s customer service reputation, and potential household discounts.
Because the benefits are fixed by law, shopping for Medigap is fundamentally a process of choosing the plan letter that offers the right level of coverage for you, and then finding the carrier that offers that letter at the most competitive and stable price.
Every Medigap plan, from A to N, covers a set of basic core benefits:
Where the plan letters differ is in how they handle the remaining gaps: the Part A deductible, the Part B deductible, skilled nursing facility coinsurance, Part B excess charges, and foreign travel emergency coverage.
While there are ten standardized letters available, the vast majority of Texans enroll in one of three plans: Plan F, Plan G, or Plan N. Understanding the distinctions among these three plans is the most crucial step in the Medigap decision-process.
Historically, Medigap Plan F was the most popular policy in the nation. It provides the most comprehensive coverage available, covering every single gap left by Original Medicare. If you have Plan F, you have zero out-of-pocket costs for Medicare-approved services. You pay your monthly premium to the carrier, and you never see a medical bill for a covered service—no deductibles, no copays, no coinsurance.
However, federal legislation (MACRA) changed the rules regarding Medigap plans that cover the Medicare Part B deductible. By law, Plan F (along with Plan C) is no longer available to individuals who became eligible for Medicare on or after January 1, 2020.
If you were eligible for Medicare prior to January 1, 2020, you are “grandfathered in” and can still purchase or keep Plan F in Texas. If your Medicare eligibility began after that date, you are legally barred from purchasing Plan F. Because new, younger beneficiaries can no longer enter the Plan F risk pool, the average age of Plan F policyholders is rising, which often leads to steeper annual premium increases compared to other plan letters.
For anyone newly eligible for Medicare, Plan G is the most comprehensive coverage available, and it has largely taken the place of Plan F as the gold standard of Medigap coverage.
Plan G covers exactly everything that Plan F covers, with one single exception: it does not cover the annual Medicare Part B deductible. Under Plan G, you are responsible for paying the Part B deductible out of pocket each year. Once that single annual deductible is met, Plan G functions identically to Plan F, covering 100% of your remaining Medicare-approved costs for the rest of the calendar year.
Because you are taking on the responsibility for the Part B deductible, the monthly premiums for Plan G are noticeably lower than those for Plan F. In many cases, the annual savings in premium costs far outweighs the cost of paying the Part B deductible yourself, making Plan G a highly cost-effective choice for comprehensive coverage.
Plan N is the fastest-growing Medigap policy for beneficiaries seeking a lower monthly premium in exchange for taking on a small amount of shared medical costs.
Like Plan G, Plan N does not cover the Part B deductible. However, Plan N introduces two distinct cost-sharing mechanisms after that deductible is met:
Understanding Excess Charges in Texas: An “excess charge” occurs when a doctor does not accept “Medicare assignment.” Accepting assignment means the doctor agrees to accept the Medicare-approved amount as payment in full. If a doctor does not accept assignment, federal law allows them to charge up to 15% more than the Medicare-approved amount for their services. This extra 15% is the “excess charge.”
Some states have specific laws (MOM, or Medicare Overcharge Measure laws) that prohibit doctors from billing excess charges entirely. Texas does not have such a law. In Texas, providers are legally permitted to bill excess charges. Plan G covers these excess charges entirely. Plan N does not, meaning if you see a provider in Texas who does not accept Medicare assignment, you will be billed for that 15% surcharge out of your own pocket. While the vast majority of doctors nationwide do accept Medicare assignment, this is a distinct financial risk inherent to Plan N.
| Coverage Gap | Plan G | Plan N | Notes |
|---|---|---|---|
| Part A Deductible | 100% Covered | 100% Covered | Protects against major hospital admission costs. |
| Part B Coinsurance (the 20%) | 100% Covered | Covered, except for specific copays | Plan N requires up to $20 for office visits and $50 for the ER. |
| Part B Deductible | Not Covered | Not Covered | Neither plan covers this; you must pay it annually. |
| Part B Excess Charges | 100% Covered | Not Covered | Texas allows providers to charge up to 15% extra; Plan G protects against this. |
| Foreign Travel Emergency | 80% Covered (up to limits) | 80% Covered (up to limits) | Subject to a distinct deductible and lifetime maximum. |
Timing is arguably the most critical aspect of purchasing a Medigap policy. Your ability to buy the plan you want without facing medical scrutiny depends entirely on when you apply.
The absolute best time to buy a Medigap policy in Texas is during your Medigap Open Enrollment Period (OEP). This is a one-time, six-month window that begins on the first day of the month in which you are both 65 or older and enrolled in Medicare Part B.
During this six-month window, you have guaranteed issue rights governed by federal law. This means any insurance carrier offering Medigap in Texas must sell you any Medigap policy they offer, regardless of your health status. They cannot deny your application, they cannot impose waiting periods for pre-existing conditions, and they cannot charge you a higher premium because of past or present health issues.
If you have a chronic condition, such as diabetes, heart disease, or a history of cancer, enrolling during this specific six-month window is the only way to guarantee you can secure the comprehensive coverage of a policy like Plan G without facing financial penalties or outright rejection.
Once this six-month window closes, it is gone forever. You cannot get it back.
If you attempt to purchase a Medigap policy or switch Medigap carriers after your six-month Open Enrollment Period has expired, you are no longer federally protected from health-based discrimination (unless you trigger a specific guaranteed issue event, discussed below).
In Texas, applying outside your OEP means the insurance carrier will subject your application to medical underwriting. The carrier will ask a series of detailed health questions on the application. They will review your medical history, current prescriptions, and potentially request records from your primary care physician.
Based on this underwriting process, the carrier has the legal right to:
Common conditions that often result in an automatic denial during medical underwriting include recent heart attacks or strokes, COPD, Parkinson’s disease, Alzheimer’s disease, severe kidney disease, or currently receiving treatments for cancer. Because Texas is not an annual guaranteed issue state (like New York or Connecticut), protecting your coverage by enrolling during your initial OEP is vital.
There are specific, exceptional situations where you have a “Guaranteed Issue Right” to buy a Medigap policy outside of your Open Enrollment Period without being subjected to medical underwriting. These rights are usually triggered when you lose existing health coverage through no fault of your own.
You may have a Guaranteed Issue right (bypassing medical underwriting) in Texas if you meet any of the following criteria:
If you trigger a guaranteed issue right, you generally have a 63-day window to apply for a Medigap policy. However, under federal rules, a guaranteed issue right does not grant you access to every plan letter. Typically, guaranteed issue rights allow you to purchase Plan A, B, C, D, F, G, K, or L, depending on when you became eligible for Medicare. Plan N is notably excluded from federal guaranteed issue protections, meaning carriers can still require medical underwriting for Plan N even if you lose employer coverage.
While the federal government standardizes the medical benefits of Medigap plans, individual states regulate how insurance carriers calculate and increase monthly premiums over time. In Texas, insurance companies use three different pricing methods to set their rates. Understanding these methods is essential for predicting your long-term healthcare costs.
The vast majority of Medigap policies sold in Texas use the attained-age rating method. Under this model, the premium is based on your current age (the age you have “attained”). When you first enroll at age 65, the premium is relatively low. However, as you get older, the premium automatically increases. You can expect your premium to rise every year on your birthday or the policy anniversary, simply because you are a year older. This is in addition to any general inflation-related rate hikes the carrier imposes on the entire market. Over a decade, attained-age policies can become quite expensive.
Under the issue-age method, the premium is based on your age at the time you purchase (are “issued”) the policy. If you buy the policy at age 65, you will always pay the baseline rate for a 65-year-old. The premium does not automatically increase just because you celebrate a birthday. However, premiums will still go up over time due to healthcare inflation and rising medical costs across the risk pool. In general, an issue-age policy will start with a higher initial premium than an attained-age policy, but the rate of increase over time is much slower and more predictable.
Community-rated (or “no-age-rated”) policies charge the exact same monthly premium to everyone who holds that specific plan in a given geographic area, regardless of their age. A 65-year-old and an 80-year-old living in the same Texas county would pay the exact same baseline premium. These policies ignore age as a pricing factor entirely. While highly stable, community-rated policies are exceedingly rare to find offered by carriers in the Texas market.
Many Medigap carriers in Texas offer a “household discount” or “spousal discount” to lower premiums. If you and your spouse (or sometimes, any two adults living at the same address) both purchase a Medigap policy from the same insurance company, the carrier may apply a discount ranging from 5% to 12% off both premiums. When comparing carrier quotes, always factor in whether a household discount applies to your situation, as it can significantly change which carrier is the most cost-effective over a year.
Most individuals become eligible for Medicare at age 65. However, individuals under 65 who receive Social Security Disability Insurance (SSDI) benefits for 24 months, or who have End-Stage Renal Disease (ESRD) or ALS, also become eligible for Medicare.
Purchasing a Medigap policy under the age of 65 is incredibly difficult in many parts of the country. Federal law only guarantees Medigap enrollment for those 65 and older. State laws dictate what protections exist for disabled beneficiaries under 65.
Texas state law provides a specific protection: Texas requires Medigap insurance companies to offer at least Medigap Plan A to individuals under 65 who qualify for Medicare due to disability.
This means if you are on Medicare due to SSDI in Texas, you have a six-month Open Enrollment Period (starting the month you enroll in Part B) to purchase Medigap Plan A without being subjected to medical underwriting.
However, there are significant caveats:
Fortunately, when a disabled beneficiary turns 65, they trigger a brand-new, second six-month Medigap Open Enrollment Period. At age 65, they can purchase any Medigap plan available (like Plan G) at the standard 65-year-old premium rate, with full federal guaranteed issue protections.
When transitioning to Medicare, you face a fork in the road: you must choose between structuring your coverage with Original Medicare plus a Medigap policy, OR enrolling in a private Medicare Advantage (Part C) plan. You cannot have both. It is illegal for a broker or carrier to sell you a Medigap policy if you are enrolled in a Medicare Advantage plan.
Medicare Advantage plans (such as AARP Medicare Advantage CareFlex from UnitedHealthcare, or plans from Baylor Scott & White Health Plan and Wellcare) replace Original Medicare. They manage your Part A and Part B benefits through a private network.
The choice between the two models comes down to how you prefer to pay for healthcare and how much control you want over your providers:
If you spend part of the year outside of Texas, or if you want the unhindered ability to seek out top specialists nationwide without requesting permission from an insurance network, Medigap is the structurally superior choice.
It is critical to understand that modern Medigap policies do not include prescription drug coverage. They only supplement the medical and hospital services covered by Medicare Part A and Part B.
If you enroll in Original Medicare and purchase a Medigap policy, you must also purchase a separate, standalone Medicare Part D prescription drug plan to cover your medications. Part D plans are sold by private insurance companies and carry their own separate monthly premiums, deductibles, and formularies (lists of covered drugs). If you fail to enroll in a Part D plan when you are first eligible, Medicare will assess a permanent late enrollment penalty that will be permanently added to your future Part D premiums.
Selecting the right Medigap policy is a structured decision process. Follow these steps to narrow down your options:
Speak with a licensed producer to compare Medigap rates, review carrier rate-increase histories, and find the right standardized plan for your situation.
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