Focus Report, Volume 76, Number 5, February 1999 Page: 9
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House Research Organization Page 9
4 percent standard is sufficient because nonprofit
hospitals also provide communities with hard-to-
calculate or intangible benefits, such as increased
employment opportunities, improved access to health
care, and medical research. Assessing the actual
value of tax exemptions is difficult and would require
periodic appraisals and measurements.
- Reporting and accounting practices. According to
critics, the law allows hospitals to credit toward their
indigent care obligation some costs that are not
directly related to indigent care (such as parking lots
or doctors' offices), or to credit a whole system of
hospitals with meeting an uncompensated care
requirement that is actually fulfilled by only a few
hospitals within that system. Hospitals say they
should be able to count basic costs of doing business
as part of their charity care mission. They also say
that the new reporting provisions rightly allow them
to include bad debts, a large portion of their
uncompensated costs. Also, the state loses no benefit
if only a few hospitals within a system provide much
of the charity care, because other system hospitals,
such as those located in relatively wealthy suburbs,
may face low demand for charity care and other
community benefits.
Public/Private Health-Benefit
Coverage
Texas Healthy Kids Corporation
THKC is a nonprofit public/private enterprise
established by HB 3 in 1997 to provide health-benefit
coverage to uninsured children. The corporation is not an
insurer but contracts with private companies to provide
coverage at affordable rates. Enrollment began on
August 15, 1998, in Nueces and Smith counties, and has
since expanded to 56 additional counties. THKC plans
to open enrollment to the rest of the state in February
1999.
The corporation has decided for now to offer
coverage to children aged 2 through 17. Eligibility for
THKC coverage is not based on family income. The
child must be a Texas resident attending school and must
have been uninsured for at least 90 days.
Parents of enrolled children are responsible for
premium payments, copayments, coinsurance, and
deductibles. Premium payments are expected to be theinsurer but typically range from $41 to $68 per child per
month. Premium payment assistance, available through a
THKC fund derived from private donations, allows
families with incomes below 180 percent of the FPL to
purchase health coverage for $10 to $20 per month per
child. THKC also offers a loan program for families
who need temporary assistance in meeting premium
payments.
As of January 1, 1999, THKC had enrolled 770
children. First-year enrollment efforts focused on
reaching families who would pay their premiums in full.
These families, however, account for only 25 percent of
the children enrolled so far. About 75 percent receive
some level of premium assistance.
The state contributed about $3 million for start-up
costs in fiscal 1998-99 and is expected to provide $3
million for operating costs in fiscal 2000-01. HB 1, the
filed version of the budget bill, would appropriate this
amount from funds the state has received from the
tobacco lawsuit settlement. (See page 11.)
In addition to state appropriations and family
payments, the corporation also accepts grants and gifts
of money, property, and services. Under certain
conditions it may use community benefit donations made
by nonprofit hospitals.
Major issues:
" Program success. Because enrollment in THKC
coverage began less than a year ago, it is too early
to measure whether the corporation is achieving the
goals of lowering the number of uninsured children
in Texas and achieving related Medicaid savings.
The Legislative Budget Board's fiscal note for HB 3
anticipated that by 2002, state financial support of the
corporation would cease and the program would have
realized a net general revenue savings of about $33
million in the Medicaid program. The LBB did not
project savings from reduced charity care given by
public and private hospitals and other health-care
providers. Detractors maintain that the corporation is a
new state bureaucracy implementing a new public
benefit program that will continue to grow and sap tax
dollars.
Efforts to raise private funds to support premium
assistance have proven difficult. Texas Blue Cross/
Blue Shield, however, has offered to donate $10
million over the next five to 10 years, as part of alarger agreement with the attorney general concerning
Page 9
House Research Organization
primary source of funding. Premium costs vary by
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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/m1/9/: accessed July 16, 2024), University of North Texas Libraries, The Portal to Texas History, https://texashistory.unt.edu; crediting UNT Libraries Government Documents Department.