Understanding Texas Medigap Plans and Eligibility Rules
The age when you become eligible for Medicare can be a bit confusing, especially if you mix it up with Social Security. Let’s clear that up right away: if you’re turning 65 and qualify for Medicare, it generally starts on the first day of the month you were born. But if you’ve qualified for Medicare before reaching 65 due to social security disability, your eligibility begins after receiving social security disability benefits for 24 months. However, the types of Medicare supplement plans available can vary depending on where you live, and in Texas, it’s based on your age.
Before we dive into the rules, it’s essential to know that when you first activate Part B of Medicare, there’s an open enrollment period for choosing a Medigap plan. During this time, you don’t have to go through any health checks or underwriting. You’re guaranteed access to a plan for up to six months beyond your Part B effective date. This special window applies to everyone, regardless of their age when they first get Medicare. The age-related eligibility rules come into play when it comes to which plans you can access. The options for people under 65 are limited.
Here’s a breakdown of how eligibility rules for different plans work in Texas, based on your age:
Ages 65 and Older: If you’re turning 65 or older, you have access to all Medicare supplement plans, ranging from Plan A through Plan N. There’s also a high-deductible option. Plan F is quite popular because it covers all deductibles and co-insurance you’d typically pay. However, Plans G and N are gaining popularity by offering slightly lower premiums in exchange for some cost-sharing on your part.
People Under 65 in Texas: For those on Medicare under the age of 65 in Texas, there’s a catch. Most of these individuals have access to only Plan A. Here’s why: each insurance company can decide which supplement plans they want to offer to their applicants. The only plan they must offer to everyone is Plan A. Insurance companies anticipate that people under 65 who qualify for Medicare usually have significant health conditions, meaning they’ll likely use their benefits more often, which can be costly for the insurance company. Consequently, most insurers in Texas only offer Plan A to individuals aged 64 and younger. Plan A offers fewer benefits and requires more cost-sharing from the beneficiary. Insurance companies can also set their Plan A premiums based on age, so it’s often considerably more expensive for younger beneficiaries.
To be clear, Plan A Medicare supplement still provides many benefits. While it may not cover deductibles or skilled nursing co-insurance, it does cover one of the most critical gaps: the 20% co-insurance for Part B outpatient care that beneficiaries would otherwise have to pay. This is crucial because Part B covers more than just doctor visits; it also includes significant expenses like chemotherapy, radiation, and dialysis. Without supplemental coverage, treating a severe health condition can rack up thousands of dollars in costs.
Since a standard Medigap plan allows you to see any doctor accepting original Medicare, Plan A can still be a good fit for people who want access to various healthcare providers and hospitals, especially if they’re uncomfortable with network-based Advantage plans. However, as all supplement plans experience rate increases over time, it can be challenging for younger Medicare beneficiaries to manage these increases on their Plan A for many years. Unfortunately, their health conditions often prevent them from passing underwriting to switch to a lower-cost carrier.
The good news is that when beneficiaries reach the age of 65, they get a second open enrollment window, allowing them to switch to any supplement plan of their choice during that time. Understanding the eligibility rules for various plans can be quite complex, so consulting an independent insurance agent for help in grasping your eligibility and enrollment options can save you a lot of time and research.
Photo by Andrea Piacquadio