Wednesday, February 16, 2011

Texas analyzes whether to opt out of the Medicaid Program

Some in Texas think the state should opt out of the Medicaid Program.  The Texas Legislature requested its state agencies analyze that option.  See the report below.  It appears, though, it would cost Texas more money to opt out than to stay in.  The report is clear that the Medicaid Program, however, is on a financially unsustainable path.  

Here are some of the findings from the report:

Medicaid expenditures comprise about 15% of all personal health care spending in Texas, and certain essential health care services are particularly reliant on Medicaid funds:

  1. Medicaid assists two-thirds of Texans in nursing homes.
  2. Medicaid pays for more than half of all births in the state.
  3. Medicaid provides billions of dollars to hospitals to help cover the cost of care to indigent, uninsured Texans and unauthorized immigrants.
  4. Medicaid and its companion Children's Health Insurance Program (CHIP) provide insurance to 3.8 million low income Texans each month.
With a 9% annual rate of growth in Texas, the Medicaid program, according to the Congressional Budget Office, is unsustainable at the state and federal level:

  1. In FY 2011, Texas Medicaid expenditures (state and federal) will exceed $30 billion, up from $11 billion in FY 2000. This 170% increase in just 11 years far exceeds growth in state tax revenue.
  2. The program now consumes more than 25% of the state budget and increasingly strains funding available for other budget priorities.
  3. New Medicaid spending mandated by the ACA will exacerbate the program's financial imbalances, especially beyond 2019, when the federal government transfers more of the cost of complying with the ACA to the states.


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