Focus Report, Volume 76, Number 5, February 1999 Page: 6
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Page 6 House Research Organization
teens could be eligible for Medicaid only if their family's
income was below 25 percent of the FPL.
About 64 percent of Medicaid expenditures pay for
mostly long-term care services for low-income aged and
disabled people, who constitute 23 percent of Texas'
Medicaid population. Medicaid funds also are used to
pay monthly Medicare premiums for low-income elderly
and disabled individuals who are also Medicare-eligible.
Medicare, the federally funded health insurance program
for aged and disabled people of all income levels,
primarily pays for short-term "acute care" services.
In 1995, the Legislature directed that the Texas
Medicaid program convert from a fee-for-service-based
program to a managed care system, in which the state
contracts with HMOs or individual doctors to form the
state-administered Texas Health Network. Medicaid
managed care programs, called STAR (State of Texas
Access Reform) programs, are now established in six
areas of the state and will be in place statewide by
2002. A special Medicaid pilot project in Harris County,
called STAR+PLUS, provides both acute and long-term
care services through managed care organizations.
Major issues:
" High numbers of eligible but unenrolled children.
Recent state estimates show that almost 600,000
uninsured children are eligible for Medicaid coverage
but are not enrolled. Reasons include the difficult
application process, stigmatization associated with
welfare, traditional habits of seeking health-care
benefits only when sick, and the lack of effective
state outreach - which some say has been based on
state incentives to keep enrollment, and therefore
costs, low.
" Uneven eligibility requirements. Income and age
requirements can split family members into those who
are covered by Medicaid and those who are not. For
example, within the same family, Medicaid may cover
a mother and a baby, but not a sick 9-year-old child.
Families often cycle in and out of Medicaid coverage
because of changes in income, age, and pregnancy
status. Some people also argue that the procedures for
reporting and verifying assets, put in place by the
Legislature to prevent people who are income-poor
but asset-rich from obtaining Medicaid benefits, are
too bureaucratic and time-consuming and prevent
eligible families from enrolling.
" Maximizing state and local expenditures. Some
advocate expanding Texas Medicaid coverage toinclude children and adults now being served by
public hospitals, hospital districts, and counties. This
would relieve local entities from bearing the total
cost of indigent care by matching their expenditures
with federal Medicaid dollars. SB 10, enacted in
1995, directed state agencies to develop a
coordinated approach that would match local
expenditures with federal Medicaid funds and expand
coverage to more uninsured individuals. However, the
state has not yet designed a plan that both meets
federal approval and satisfies local concerns about
controlling the expenditure of local funds.
- Managed care versus fee-for-service approach.
More evaluation is needed to determine whether the
benefits of using managed care to reduce state
Medicaid costs will outweigh difficulties in
implementing managed care and instructing doctors
and patients how to use the new system. Managed
care provides recipients with a "medical home"
where they may receive consistent oversight of their
health. However, some fear that private managed
care organizations could threaten the delivery of
indigent health care by receiving Medicaid payments
that formerly helped support public hospitals and
other traditional charity care providers and by not
providing adequate care to enrollees.
Disproportionate Share Hospital
Program
This program, also called Dispro or DSH, makes
special payments through Medicaid to hospitals that
serve a large number of indigent patients. In fiscal
1997, about 170 Texas hospitals received $1.5 billion in
DSH payments, of which $950 million was federal
money. The federal government subsidizes DSH at the
same matching rate as for health care services (62
percent federal, 38 percent state funds). Texas uses local
public hospital and hospital district tax dollars and
state-appropriated funds to state hospitals to pay for the
state's Medicaid share of the Dispro program, thereby
using dollars already being spent to obtain matching
federal funds.
Major issue:
- Funding losses. Due to federal program changes in
1991 and 1993, DSH payments have been
dramatically declining in Texas, eroding important
financial support for health care for the uninsured.
Texas is expected to lose an estimated $450 million
in federal DSH payments over the next five years.0
House Research Organization
Page 6
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Texas. Legislature. House of Representatives. Research Organization. Focus Report, Volume 76, Number 5, February 1999, periodical, February 4, 1999; Austin, Texas. (https://texashistory.unt.edu/ark:/67531/metapth641172/m1/6/?rotate=90: accessed July 16, 2024), University of North Texas Libraries, The Portal to Texas History, https://texashistory.unt.edu; crediting UNT Libraries Government Documents Department.