12/3/2010 2:53 PM
A report released this afternoon by the Texas Health and Human Services Commission and Texas Department of Insurance is making waves for analyzing the costs of a plan some critics are calling unthinkable and supporters are calling inevitable: the state opting out of Medicaid.
The report suggested that if Texas were to adopt its own state-run health insurance program to cut costs, 2.6 million residents could be left without insurance. The report was mandated by HB 497 from the 81st Legislative Session.
Impact on Texas If Medicaid Is Eliminated (78 pages, PDF format)
"Virtually every state in the nation is facing a severe budget shortfall made worse by rising costs in Medicaid," the executive summary of the report read. "The current trajectory of the program is unsustainable and has led states to begin researching and debating the possibility of opting out of Medicaid. Without significant reform at the federal level, states are left facing a no-win dilemma. Opting out of Medicaid means giving up federal tax dollars paid by the state’s residents [$15 billion in matching funds] to provide health care for our most vulnerable residents. Staying in the program forces states to pay for a federally-mandated expansion of Medicaid [a la Obamacare] with little control over the program’s ever-rising costs, exacerbating an already unsound financial situation."
LSR is currently taking a closer look at the claims made by the report.
“The current Medicaid system is financially unsustainable for states and the federal government, as costs increase about nine percent per year in Texas alone, said Gov. Rick Perry this afternoon. "Without greater flexibility and the elimination of federal strings, Medicaid will strangle state budgets and taxpayers as Obamacare and other programs expand Medicaid rolls.
“Texas, the states and the federal government would be much better served by increasing flexibility and innovation in Medicaid, even block granting funds to the states, so we can tailor Medicaid dollars to best serve the needs of Texas patients, families and taxpayers. I have discussed these issues with other governors and policy experts, and will be working on ways to improve the utilization of Medicaid dollars in Texas.”
Naturally, Democratic Rep. Garnet Coleman (Houston) disagreed.
"We now have an official report that confirms some our biggest fears," Coleman said. "It would cost Texas more money to administer its own program which would result in fewer services. If you want to save real dollars, you have to throw real people out on the street. Medicaid is a good program for the state of Texas, and opting out to create some new program would be a fool's errand.
"Governor Rick Perry's real motive is to make other cuts to Medicaid seem more palatable. None of it is acceptable. We absolutely cannot cut reimbursement rates to Medicaid providers to the point that they are so low, that the program will be ineffective. Cutting optional programs would also devastate Texans served by Medicaid. Governor Perry's proposals would hurt our elderly, disabled, and low income children. I hope that the Governor stops considering these unrealistic options and starts working on actual solutions."