Texas health exchange overview
Texas uses the federally run exchange at HealthCare.gov to enroll Texans in marketplace plans. Although their future is uncertain, there are bills under consideration in Texas in the 2023 legislative session (HB700, HB2554, and SB344) that would create a state-run health insurance exchange.
Fifteen health insurance carriers offer 2023 coverage through the Texas marketplace/exchange. That includes three newcomers (Ascension Personalized Care, Cigna, and Imperial Insurance Companies), but there were also two insurers that left the exchange at the end of 2022 (Bright and Friday).
Texas has the nation’s second-highest exchange enrollments in the country, and leads the nation in terms of how fast new enrollees are signing up for coverage (enrollments count both new enrollees and renewing enrollees). Enrollment in the Texas exchange reached a record high 2.4 million people during the open enrollment for 2023 coverage; the previous record high had been 1.8 million enrollees the year before.
Premiums for individual/family health coverage increased sharply in Texas in 2018, and insurers mostly started adding the cost of cost-sharing reductions (CSR) to silver plan rates, resulting in particularly large premium subsidies (which are based on the cost of silver plans). Rate changes have been mostly modest since then, but it’s important to note that Texas implemented a new rule — for coverage effective in 2023 and future years — requiring health insurers to add a 35% load to the cost of silver plans to account for CSR. This effectively makes silver plan prices higher than most gold plan prices, resulting in larger subsidies and even more affordable premiums for bronze and gold plans.
In addition, the American Rescue Plan and Inflation Reduction Act have resulted in larger and more widely available subsidies.
Frequently asked questions about Texas’ ACA marketplace
What type of health insurance marketplace does Texas operate?
Texas uses the federally run exchange at HealthCare.gov, and the state has taken a very hands-off approach with regards to implementing the ACA. Texas has not expanded Medicaid, and through 2021, was one of just three states that left the rate review process for ACA-compliant plans to CMS. That has changed as of 2022, however, with the implementation of a state-based rate review program (details below).
And lawmakers in Texas are considering bills in 2023 (HB700, HB2554, and SB344) that would create a state-run health insurance exchange.
Texas has one of the highest exchange enrollments in the country, trailing only Florida. During the open enrollment period for 2023 coverage, more than 2.4 million people enrolled in private qualified health plans (QHPs) through the Texas exchange. This was by far a record high, eclipsing the previous record high of 1.8 million enrollees the year before.
According to US Census Bureau data, Texas had the highest uninsured rate in the country in 2013, at 22.1%, and it has continued to have the highest uninsured rate in the nation ever since. Although 18.4% of Texans were still uninsured as of 2019, a substantial number of Texas residents have obtained health coverage since the ACA was implemented.
However, the number of people gaining coverage would be far higher if Texas were to accept federal funding to expand Medicaid under the ACA. Among adults with income up to 138% of the poverty level (ie, the population that would be Medicaid-eligible if Texas were to expand Medicaid), Texas still has the highest uninsured rate in the country; 45% of the state’s lowest-income residents are without health coverage.
When can I enroll in health insurance in Texas?
Which health insurance carriers offer coverage in the Texas marketplace?
Which health insurance carriers have offered coverage in the Texas marketplace in the past?
How did Texas exchange premiums change for 2023?
How have premiums changed in the Texas exchange in previous years?
What does the new Texas law about Farm Bureau health plans mean for consumers?
How does Texas protect consumers from surprise balance billing?
How many people are enrolled through the Texas health insurance exchange?
Texas now has its own rate review program and requires insurers to add a specified amount to silver plan rates to account for CSR, resulting in larger premium subsidies
In 2021, Texas enacted S.B.1296. This legislation creates a rate review program in the state, which means that Texas no longer defers to the federal government for the rate review process, starting with the 2023 rates that were filed by insurers in 2022 (prior to 2022, Texas, Wyoming, and Oklahoma were the only states that had the federal government conduct their rate reviews, rather than doing it themselves).
Texas lawmakers noted that a state-based rate review program will allow them to ensure that health insurance companies take a uniform approach to “silver loading” the cost of cost-sharing reductions, which will increase the size of premium subsidies that Texas residents receive.
As of the 2023 plan year, insurers in Texas must add a 35% load to the cost of silver plan rates to account for CSR (in prior years, many Texas insurers did add the cost of CSR to silver plan rates, but the approach wasn’t uniform or universal). This results in larger subsidies — because subsidies are based on silver plan rates — and effectively makes most silver plan rates higher than most gold plan rates. So bronze and gold plans will be more affordable for many Texas exchange enrollees in 2023.
A self-employed married couple can still purchase small group coverage in Texas
As a result of the Affordable Care Act, federal law only allows a self-employed married couple to purchase small group health insurance if there is at least one additional employee. Even if both spouses are work for their business, they aren’t considered to be two separate employees (and thus eligible for group health coverage, which requires at least two employees) under federal law. But Texas law is different, and takes precedence in this case. In Texas, a small group insurer must issue coverage to any group of two or more employees, even if the group only has two employees who are married to each other.
Exchange enrollees identified on ID cards
At the end of May 2015, the Texas state senate passed House Bill 1514, and Governor Abbott signed it into law the following month. The law became effective in September 2015, and requires insurance carriers to label policy ID cards with “QHP” (qualified health plan) if the plan was purchased through the exchange.
The initial version of the House bill called for two different designations for exchange-purchased policy ID cards: “QHP” for plans purchased without a subsidy, and “QHP-S” for plans purchased with a subsidy (86 percent of the exchange enrollees in Texas are receiving subsidies). But the version that was ultimately signed into law dropped the “S” and simply calls for identifying all exchange enrollees with the “QHP” designation.
Many provider organizations were in support of HB 1514, because there’s a 90-day grace period for subsidized exchange enrollees who fall behind on their premiums, as opposed to the 30-day grace period for plans purchased outside the exchange and for non-subsidized exchange plans. During that time, carriers have to pay claims from the first 30 days, but can retroactively deny claims from the following 60 days (assuming the patient doesn’t pay the past due premiums) and can require the provider to refund payments made during that time.
Supporters of the bill claim that the QHP designation simply serves to keep providers aware of the need to remind their patients to remain current with their premiums. But the QHP label lets providers know that chances are, the patient is receiving a subsidy and thus has a 90 day grace period to remain current on premiums. It’s not unreasonable to assume that some providers would then choose to not work with those patients. The bill generated considerable controversy between provider organizations and consumer advocates.
Grandmothered plans may renew
In November 2013, the federal government announced that states could allow non-grandfathered, pre-2014 health plans (dubbed “grandmothered” plans) to renew again and remain in force in 2014. In March 2014, they issued another extension for these transitional policies, allowing states to let them continue to renew as late as September 2016. The majority of the states have accepted that proposition, but in 2014, Texas regulators simply didn’t issue any guidance whatsoever on the matter (in interviews with insurance officials in each state, Texas was alone in this regard – every other state took a position either for or against renewal of grandmothered plans).
Because Texas didn’t issue any guidelines for renewal of grandmothered plans, regulators initially said that grandmothered plans would not be allowed to renew in Texas in 2014. But they eventually reversed course on this, with the Department of Insurance simply noting that they do not object to carriers renewing grandmothered plans in accordance with federal guidelines. HHS has since issued additional guidance (in early 2022), allowing transitional plans to continue to renew until further notice (at states’ and insurers’ discretion). Texas is allowing this, so it’s up to each insurer to decide whether to continue to renew transitional plans or not.
Exchange history and legislation
Former Texas Gov. Rick Perry formally notified the Department of Health & Human Services (HHS) in July 2012 that Texas would not implement a state-run health insurance exchange. In his notification letter, Perry — a long-standing opponent of the Affordable Care Act — called the ACA provisions “brazen intrusions into the sovereignty of our state.”
Texas State Representative Eric Johnson, a Democrat from Dallas, did introduce bills in early 2013 that would have created a state-run exchange and expanded Medicaid, but neither was successful. HHS is running the exchange in Texas, and the state is one of only 12 where Medicaid still has not been expanded as of 2022.
The Texas High-Risk Pool (a health plan for people with pre-existing conditions that pre-dates the ACA) remained open for the first three months of 2014, after originally being scheduled to cease operations at the end of 2013. This was the case in several states, as HealthCare.gov had some significant glitches in the first open enrollment period, which hampered enrollment efforts.
In January 2014, the Perry Administration’s efforts to make it more difficult to be a navigator in Texas drew criticism from ACA supporters and Democratic lawmakers, who claimed that Perry was simply trying to impede enrollment in the Texas exchange.
According to a Kaiser Health News article, Blue Cross Blue Shield of Texas played a major role in educating state consumers about the federal health insurance marketplace in its early days. The Blues plan used many strategies to reach consumers: creating a website, launching a texting campaign, and engaging churches, community clinics, nonprofits, and other community organizations.
Texas health insurance exchange links
HealthCare.gov
800-318-2596
Texas Health Plan Compare (a service of the Texas Department of Insurance)
State Exchange Profile: Texas
The Henry J. Kaiser Family Foundation overview of Texas’ progress toward creating a state health insurance exchange.
Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org. Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.
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