The Facts

* For the 2012-13 biennium, the Legislature appropriated $39 billion in All Funds for the Medicaid program alone. In the current biennium, that figure is about $58.5 billion—a 50% increase.

* Children have increased as a percentage of total Medicaid enrollment due to economic factors and provisions of the ACA that are causing children to move from the Children’s Health Insurance Program (CHIP) into Medicaid. The ABD population in Medicaid is also expected to increase consistently as the Baby Boom generation ages.

* Rising Medicaid costs largely account for the growth in health and human services spending, which in the upcoming biennium could surpass education spending in the state budget.

* States must adhere to strict federal rules about how much Medicaid enrollees are allowed to contribute to the cost of care and what benefits they are entitled to receive. As long as the state participates in the program, Texas must provide medically necessary care to all eligible individuals, regardless of whether the enrollee needs or wants those benefits.

* States are not allowed to use federal Medicaid dollars to pay for private coverage for Medicaid-eligible individuals unless the state pays for wrap-around benefits not covered by the private plan.


* The state should continue to pursue a block grant for Medicaid in order to give the state greater flexibility to reform the program and greater certainty in the Medicaid budget from year-to-year. This includes petitioning the state’s Congressional delegation to pursue block grant legislation in Washington, D.C.

* The Legislature should pass a Medicaid block grant act that would serve as a trigger if and when block grant funding is passed by Congress. Such a bill would send a strong message nationwide that Texas has developed a detailed plan for how to amend its state plan and enact fundamental Medicaid reform if it were given the opportunity to do so.