SB963

Regular Session

Relating to allowing Medicaid managed care organizations to engage in marketing about the availability of certain private health benefit plan coverage.

ModeratePlan for compliance

Low Cost

Effective:2025-09-01

Enforcing Agencies

Texas Health and Human Services Commission (HHSC)

Compliance Analysis

Key implementation requirements and action items for compliance with this legislation

Implementation Timeline

Effective Date: September 1, 2025
Compliance Deadline: September 1, 2025 (All marketing materials and scripts must be compliant by this date; there is no statutory grace period).
Agency Rulemaking: The Texas Health and Human Services Commission (HHSC) must update the *Uniform Managed Care Manual* (UMCM).
*Regulatory Gray Zone:* Implementation is contingent on HHSC determining if a federal waiver is required. If HHSC seeks a waiver from CMS, the effective date will be delayed until federal approval is granted.

Immediate Action Plan

1. Draft Disclosure Language: Legal must immediately draft standard "Cost-Sharing Disclosure" text for both print and verbal communications.
2. Audit Vendor Contracts: Review all third-party marketing agreements to ensure they prohibit offering financial incentives for commercial plan enrollment.
3. Monitor Waiver Status: Task Government Relations with monitoring HHSC's determination regarding the federal waiver requirement; do not launch media buys until the waiver status is resolved.
4. Update CRM Logic: IT must add a mandatory checkbox or voice-log requirement to call center software to verify the disclosure was read to the consumer.

Operational Changes Required

Contracts

Uniform Managed Care Contract (UMCC): Expect a unilateral amendment from HHSC incorporating these new marketing permissions and restrictions.
Vendor Master Services Agreements (MSAs): You must amend agreements with third-party marketing agencies and call centers. Insert strict indemnification clauses regarding the ban on "material or financial gain" incentives. If a vendor offers a prohibited gift card, your MCO will be liable for the sanction.

Hiring/Training

Call Center Scripting: Scripts must be rewritten to include a mandatory "Cost-Sharing Disclosure." Agents cannot simply highlight coverage; they are legally required to inform the recipient about deductibles and copayments associated with the private plan.
Field Marketing: Field teams must be retrained on the prohibition of incentives. "Value-added services" must be distinct from enrollment incentives to avoid violating the new ban on material gain.

Reporting & Record-Keeping

CRM Updates: Your Customer Relationship Management systems must be configured to log that the mandatory cost-sharing disclosure was delivered. In the event of an audit or a Deceptive Trade Practices claim, you must be able to produce a timestamped record verifying the consumer was warned about costs.
Material Approval: All new cross-selling brochures and digital assets must be submitted to HHSC for approval prior to use.

Fees & Costs

No New State Fees: There are no new licensure fees.
Operational Costs: Budget for legal review of marketing materials and IT costs to update CRM workflows for disclosure verification.

Strategic Ambiguities & Considerations

HHSC rulemaking will define the operational boundaries of this law. Watch the *Texas Register* for the following:

1. Specificity of Disclosure: The law requires disclosing "deductibles and copayments." It is unclear if a general warning ("Plans have deductibles") suffices, or if agents must quote specific dollar amounts for specific plans. The latter would significantly complicate call handling times.
2. Definition of "Material Gain": The law bans financial incentives. HHSC must define the *de minimis* threshold. Until then, assume that even nominal items (gift cards, branded merchandise of value) tied to QHP enrollment are prohibited.
3. Waiver Determination: HHSC has the discretion to pause implementation to seek a federal waiver. This creates uncertainty regarding the actual "Go-Live" date.

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Legislative Timeline

This bill's path through the Texas Legislature

TopicsHuman Services Human Services--general Human Services--medical Assistance Managed Care Medicaid Health & Human Services Commission Advertising

Official Analysis

View HRO Analysis View All Bill Documents

BILL ANALYSIS

Senate Research Center	S.B. 963
89R1716 JG-D	By: Hughes
	Health & Human Services
	3/7/2025
	As Filed

AUTHOR'S / SPONSOR'S STATEMENT OF INTENT

Managed Care Organizations (MCOs) report that current guidelines from the Health and Human Services Commission (HHSC) restrict their ability to inform enrollees who may not qualify for Medicaid about health plan options available though healthcare.gov.

These limitations prevent MCOs from providing essential information to members who no longer qualify for Medicaid but may be eligible for subsidized coverage in the individual marketplace.

Many Texans transitioning out of Medicaid are unaware of their options. Supporting awareness of individual market options helps ensure continuity of care and prevents gaps in coverage.

S.B. 963 prevents HHSC from establishing marketing guidelines that prohibit an MCO from informing a recipient about the availability of qualified health plans offered through healthcare.gov. By allowing MCOs to provide information, Texas can continue to reduce the uninsured rate and increase access to health coverage.

S.B. 963 empowers patients to make informed decisions and gives MCOs the flexibility they desire to serve their recipients.

As proposed, S.B. 963 amends current law relating to allowing Medicaid managed care organizations to inform Medicaid recipients about the availability of certain private health benefit plan coverage.

RULEMAKING AUTHORITY

This bill does not expressly grant any additional rulemaking authority to a state officer, institution, or agency.

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Section 540.0055, Government Code, as effective April 1, 2025, by adding Subsection (c), as follows:

(c) Prohibits the marketing guidelines the Health and Human Services Commission establishes under Section 540.0055 (Marketing Guidelines) from prohibiting a Medicaid managed care organization from informing a recipient about the availability of qualified health plans offered through an exchange. Defines "exchange" and "qualified health plan."

SECTION 2. Requires a state agency, if necessary for implementation of a provision of this Act, to request a waiver or authorization from a federal agency, authorizes delay of implementation until such a waiver or authorization is granted.

SECTION 3. Effective date: September 1, 2025.

Senate Authors

Sen. Bryan HughesRepublican · Primary Author

Coauthors (1)

Nathan Johnson (D)

House Sponsor

Rep. Christian ManuelDemocrat · Primary Sponsor

Bill Text(with markup)

S.B. No. 963

View bill text in multiple formats on Texas Legislature website

Fiscal NoteView Original

	AN ACT
	relating to allowing Medicaid managed care organizations to engage
	in marketing about the availability of certain private health
	benefit plan coverage.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
	SECTION 1. Section 540.0055, Government Code, as effective
	April 1, 2025, is amended by adding Subsections (c) and (d) to read
	as follows:
	(c) The marketing guidelines the commission establishes
	under this section may not prohibit a Medicaid managed care
	organization from:
	(1) informing an individual, including a current or
	former recipient, about the availability of qualified health plans
	offered through an exchange, as the terms "exchange" and "qualified
	health plan" are defined by 45 C.F.R. Section 155.20; or
	(2) advertising a Medicare Advantage plan or related
	benefit offered under Part C of Title XVIII of the Social Security
	Act (42 U.S.C. Section 1395w-21 et seq.) at a community enrollment
	or other event.
	(d) The marketing guidelines the commission establishes
	under this section must require that a Medicaid managed care
	organization that informs an individual about the availability of
	qualified health plans offered through an exchange, as the terms
	"exchange" and "qualified health plan" are defined by 45 C.F.R.
	Section 155.20, also inform the individual about the potential
	deductibles, copayments, and other cost-sharing requirements under
	a qualified health plan. A Medicaid managed care organization
	informing an individual about the availability of qualified health
	plans offered through the exchange or an affiliate of the
	organization may not offer the individual material or financial
	gain as an actual or implied incentive for enrolling in a qualified
	health plan.
	SECTION 2. If before implementing any provision of this Act
	a state agency determines that a waiver or authorization from a
	federal agency is necessary for implementation of that provision,
	the agency affected by the provision shall request the waiver or
	authorization and may delay implementing that provision until the
	waiver or authorization is granted.
	SECTION 3. This Act takes effect September 1, 2025.

LEGISLATIVE BUDGET BOARD
Austin, Texas

FISCAL NOTE, 89TH LEGISLATIVE REGULAR SESSION


March 10, 2025

TO:	Honorable Lois W. Kolkhorst, Chair, Senate Committee on Health & Human Services

FROM:	Jerry McGinty, Director, Legislative Budget Board

IN RE:	SB963 by Hughes (Relating to allowing Medicaid managed care organizations to inform Medicaid recipients about the availability of certain private health benefit plan coverage.), As Introduced

No fiscal implication to the State is anticipated.

The bill would prohibit the Texas Health and Human Services Commission from implementing a policy preventing managed care organizations from providing information to Medicaid recipients about certain private health care plans. No cost to the agency is anticipated.

Local Government Impact

No fiscal implication to units of local government is anticipated.

Source Agencies:

529 Health and Human Services Commission

LBB Staff:

JMc, NPe, ER, NT

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Frequently Asked Questions

Common questions about SB963

What does Texas SB963 do?

SB963 removes the regulatory firewall preventing Medicaid Managed Care Organizations (MCOs) from cross-selling private Qualified Health Plans (QHPs) and Medicare Advantage plans to Medicaid recipients. This creates a significant revenue retention opportunity for MCOs with commercial affiliates, but strictly mandates that all marketing communications must explicitly disclose cost-sharing obligations (deductibles and copays) and prohibits financial incentives for enrollment. Implementation Timeline Effective Date: September 1, 2025 Compliance Deadline: September 1, 2025 (All marketing materials and scripts must be compliant by this date; there is no statutory grace period).

Who authored SB963?

SB963 was authored by Texas Senator Bryan Hughes during the Regular Session.

When was SB963 signed into law?

SB963 was signed into law by Governor Greg Abbott on June 20, 2025.

Which agencies enforce SB963?

SB963 is enforced by Texas Health and Human Services Commission (HHSC).

How urgent is compliance with SB963?

The compliance urgency for SB963 is rated as "moderate". Businesses and organizations should review the requirements and timeline to ensure timely compliance.

What is the cost impact of SB963?

The cost impact of SB963 is estimated as "low". This may vary based on industry and implementation requirements.

What topics does SB963 address?

SB963 addresses topics including human services, human services--general, human services--medical assistance, managed care and medicaid.

Legislative data provided by LegiScanLast updated: November 25, 2025

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