Medicaid/CHIP

Medicaid, a joint state and federal program, provides low-income Texans with a variety of services, including food stamps, financial assistance, nursing home care and health care. In Texas, the health insurance part of Medicaid covers primarily pregnant women and children. A 6 to 18-year-old child in a family of four that makes more than $20,000 per year does not qualify for Medicaid. And, the parents in that family of four do not qualify for Medicaid if they make more than $5,650 a year.

The Children’s Health Insurance Program, another joint state and federal initiative, provides health care services to children’s whose families make too much to qualify for Medicaid but are at or below 200 percent of poverty ($40,000 a year for a family of four).

Much of the pressure on the state’s Medicaid program can be attributed directly to demographics. The state’s population continues to grow and age, and health status is declining as the incidence of obesity, diabetes and other chronic conditions increases. The per capita income of the state’s population is declining, the number of poor Texans is increasing, and the level of education is continuing to decline.

In several past legislative sessions, lawmakers have limited or cut eligibility for these programs, eliminated benefits and lowered payment rates to health care providers. These short-term budget fixes have contributed to the growth of the uninsured population. Inadequate state funding also has resulted in the loss of federal matching dollars that these programs could draw down from Washington.

Local governments – such as counties and hospital districts – have transferred some of their taxes to the state to help fund these programs and draw down federal dollars. However, some of these resources are diverted to other budget items, rather than being invested in health care.

Reductions in payments to physicians for treating Medicaid patients have caused many doctors to drop participation in the program, jeopardizing Medicaid patients’ access to care. Most Texas hospitals will be paid less than 80 percent of their actual costs for every Medicaid patient treated in 2007.

Fundamental changes to Medicaid – along with adequate state funding – are needed to ensure that Medicaid provides a safety net for long-income Texans. And, appropriate investment in CHIP will give more children access to preventive and primary care, both essential for good health.

According to Texas Government Code 305.027, portions of this material may be considered “legislative advertising.” Authorization for its publication is made by John Hawkins, Texas Hospital Association, P.O. Box 15587, Austin, TX 78761-5587.