House, Senate Members Working to Reform Medicaid

Regardless of how the Supreme Court rules on President Obama’s health care reforms next month, the state of Texas is pursuing plans to completely revamp the way it runs Medicaid. Of course, it must first get the federal government’s approval.

A joint oversight committee made up of House and Senate members met Wednesday morning to hear from the state’s top public health officials and stakeholders on the process they’ll pursue to cut as many strings as possible from federal funding for the entitlement program that serves the state's poorest adults and children. The key operative word here: flexibility.

“This is an opportunity for us as a state to design a system that’s more efficient,” said state Sen. Jane Nelson, R-Flower Mound, the panel’s chairwoman. During the public hearing, she said the federal government should “allow us to do what we do best.”

The state is facing a problem much larger in scale compared with other states. Nearly 26 percent — or 6.5 million — of the state’s residents are uninsured. In 2014, the Affordable Care Act will require all Texans to sign up for health benefits (though the state estimates about 9 percent will still fall through the cracks and remain uninsured). Medicaid is expected to increase from 3.5 million to 5.7 million beneficiaries.

To deal with the increase in demand, the state is pursuing changes on two fronts. On the one hand, they are moving forward with the federal government’s recent approval of an 1115 waiver, which will allow the state to try proven or new approaches to delivering care. However, there are strict requirements that any plan the state presents be budget-neutral and maintain current coverage levels. 

Health and Human Services Executive Commissioner Tom Suehs, Deputy Commissioner Billy Millwee and Department of Aging and Disability Commissioner Chris Traylor appeared before the panel to outline their agencies’ plans for reforming delivery of acute care, including changing Medicaid benefits, instituting copayments and incentivizing Texans to take better care of themselves.

The interim group is also figuring out ways to implement SB 7, a bill passed during last summer’s special session that directs the Health and Human Services Commission to pursue a waiver that would give the state more freedom to change Medicaid eligibility requirements, encourage the use of private benefits, establish co-payments and health-savings programs, offer vouchers and make patient care more cost-effective.

(View the full presentation offered to lawmakers at today's hearing, including more details about the proposed rule changes, here.)

SB 7’s author, state Rep. Lois Kolkhorst, R-Brenham, said her legislation is intended to “create transparencies” and to lower costs while helping consumers take charge of their own health.

“As we innovate, we have to get to where the consumer understands what it costs,” she said.

State Sen. Dan Patrick, R-Houston, said he was concerned about the magnitude and long-term effects of the state's struggle to contain health costs.

“In the past we did it more through family and not through government,” he said.

Patrick later emphasized he meant to say that government is more involved than it used to be in the care of the elderly and that the growth in the size of that population — it's expected to double by 2040 — might cost more than the state can afford.

State Rep. Garnet Coleman, D-Houston, said lawmakers had a social contract to uphold in which Americans care for one another.

“It’s not 1950. … The world has changed a lot,” Coleman said.

State Rep. Brandon Creighton, R-Conroe, asked Suehs about the extent of the “unfunded mandate” related to Medicaid.

“We don’t have an unfunded mandate in Medicaid. I think what we have is more demand than we have resources,” Suehs responded.

The commission reports it is still early in the process. This spring, they will gather public input on the waivers before they deliver a concept to the federal government in the fall. It may take months for a plan to be approved.

Stakeholders include Medicaid’s current beneficiaries, nearly 2 million potential enrollees, and the medical sector Lawmakers acknowledged they would need to address the critical shortage of health care workers in the state, especially in the primary care field.

Texas Academy of Family Physicians CEO Tom Banning attended the hearing. He told The Texas Tribune that there is no “silver bullet” for solving the state’s pending crisis. 

“The broad goals envisioned in the waiver are designed to ensure the state is getting higher quality care at lower costs, which is desperately needed,” Banning wrote in an email. “We’ve got a long way to go and change is hard. We are having a healthy dialogue on the changes that need to occur, which is long overdue and a positive step in the right direction.”

Anne Dunkelberg, associate director of the Center for Public Policy Priorities, testified before the committee. Like Banning, she said the terms of the waiver remain unclear.

"It could result in either really good innovations, or truly terrible cut-backs," she warned. "The tone of today's hearing was encouragingly thoughtful, but whether this effort leads to good news or bad news for Texas' neediest will depend in large part on how high the bar is set for Texas by the Medicaid authorities in Washington."