HB 2516 does not establish any direct fiscal impact on state appropriations, since it pertains to the regulation of private insurance markets rather than the creation or expansion of state-funded healthcare programs. The bill mandates that insurers offering Medicare supplement plans (Medigap) to individuals aged 65 and older must also offer those same plans to individuals under 65 who qualify for Medicare due to disability or end-stage renal disease. These changes impose new responsibilities on private insurance carriers, not on public entities or budgets.

However, the Texas Department of Insurance (TDI) may incur minor administrative costs associated with implementing the bill, such as updating regulatory guidance, managing compliance, and overseeing the expanded enrollment rules. These costs are expected to be absorbed within existing resources, as they fall within TDI’s normal scope of regulatory activities and its current statutory authority to adopt rules and monitor insurance practices.

The bill may have secondary fiscal effects on healthcare expenditures indirectly borne by the state—such as through safety-net hospitals or Medicaid—if improved access to Medigap coverage for under-65 Medicare enrollees reduces uncompensated care or decreases reliance on Medicaid wraparound services. These effects, however, are speculative and would likely be marginal in scale compared to the overall Medicaid budget.

In sum, HB 2516 is expected to have no significant fiscal impact on the state budget, with any administrative costs falling within existing agency capabilities​.

While HB 2516 is well-intentioned in seeking to improve access to Medigap coverage for disabled individuals under 65, it imposes a one-size-fits-all mandate on private insurance providers, requiring them to offer specific plans to a narrowly defined population at fixed or capped rates. This represents a significant encroachment into the voluntary arrangements of the private health insurance market. Though it does not create a public entitlement or spend taxpayer money, it nonetheless compels private firms to offer products under terms dictated by the state, setting a concerning precedent for future regulatory expansion.

Additionally, by forcing insurers to absorb higher-risk individuals at the same or constrained prices, the bill may result in unintended consequences such as cross-subsidization, rate hikes for other enrollees, reduced competition, or market withdrawal. These distortions move us away from a market-based system and toward government-managed risk, which undermines price signals and natural innovation in the insurance market.

Rather than state-imposed mandates, Texas should explore market-driven alternatives that expand access through competition—such as loosening regulatory barriers to new insurers, enabling more flexible underwriting models, or supporting voluntary high-risk pools. These approaches preserve consumer choice, incentivize efficiency, and avoid inserting the state as an arbiter of pricing and eligibility in the private sector. Texas Policy Research recommends that lawmakers vote NO on HB 2516.

• Individual Liberty: The bill supports individual liberty by expanding access to private Medigap insurance for people under 65 who qualify for Medicare due to disability, ALS, or ESRD. These individuals currently have limited or no access to supplemental coverage, leaving them financially exposed. By requiring insurers to offer them coverage on par with seniors, the bill empowers them to exercise greater control over their healthcare choices and reduces the gap between similarly situated beneficiaries. It enhances freedom of access—without mandating purchase.
• Personal Responsibility: The bill encourages personal responsibility by allowing under-65 Medicare enrollees to voluntarily buy supplemental coverage to manage their own medical expenses. It does not subsidize or mandate participation—individuals must still pay for the plans themselves. In this sense, the bill removes structural barriers that previously punished responsible behavior (e.g., trying to purchase insurance but being denied or priced out).
• Free Enterprise: This is where principled opposition can emerge. The bill compels private insurers to offer Medigap policies to a specific new category of consumers, including prescribing premium caps (e.g., Plans A/B/D at the senior rate; other plans capped at 200%). While the bill doesn’t create a government program or price-control scheme, it does intervene in market decision-making and constrains actuarial freedom.
• Private Property Rights: The bill doesn’t directly interfere with physical or contractual property. However, it does set terms under which private businesses must operate, affecting how they can sell and price certain products. For some, this represents a soft erosion of contractual autonomy; for others, it’s standard consumer protection in a regulated insurance space.
• Limited Government: The bill increases the state’s role in regulating private insurance by mandating coverage eligibility and restricting pricing. Although it does not establish a new agency, fund, or entitlement, it expands the regulatory footprint of the Texas Department of Insurance (TDI). Some may view this as a reasonable, targeted use of government to correct a market exclusion; others see it as an example of incremental government overreach—especially since insurers must now treat medically distinct populations as actuarially equivalent.

• SB 1945 (Same As)