AUSTIN, Texas – A study released this week by the Texas Public Policy Foundation finds that despite sharply increased spending on Medicaid, the state has remained at the bottom of the national rankings of the uninsured.
The study, “Medicaid And The Uninsured” by Beau Egert, is available online at www.TexasPolicy.com. The author points out that meaningful solutions to increase access to health care for low-income families are within reach if state policymakers carefully explore innovation and market-based approaches.
“Fundamental reform of Medicaid can only come from the federal level,” concludes Egert. “But states can provide a vibrant proving ground for reforms to be adopted nationwide. Texas sent a strong signal last session with the adoption of disease management, a streamlined delivery system, and greater focus on efficiency. The challenge now is to build and expand on those reforms.”
In his study, Egert recommends a number of structural reforms to the state’s Medicaid program, most notably an increase in “consumer directed services.” Current policies regarding Medicaid, especially for the elderly and persons with disabilities, tend to presume a lack of competency on the part of the persons receiving aid, which results in higher costs. Individuals able to direct their own health care, Egert writes, should be allowed to do so.
“Perhaps ironically, we can decrease spending by improving the way we deliver services to the elderly and persons with disabilities,” he added.
Egert reports Medicaid and other health care services make up 30 percent of state budgets nationwide and these costs increased by 13 percent in 2002. This increase was the largest in a decade. Some experts are predicting Medicaid, left unreformed, could bankrupt every state in as little as 20 years. Texas is no exception.
“Our Medicaid spending is unsustainable and millions remain without health insurance,” said Egert. “We must recognize these spending trends cannot last and pursue alternative market-based solutions for the uninsured.”
Egert also recommends state policies that would make it more attractive to employers to offer health care benefits. Currently, 64 percent of the national population has insurance through an employer, while only 58 percent do in Texas.
The simplest way to do that, Egert reports, is to develop tax credits tied to purchasing pool participation.
“One of the primary strengths of tax credits is their relative simplicity,” he writes. “They do not demand any new government bureaucracies because they are administered through the existing tax system.” The linking of tax credits to purchasing pools allows these groups to achieve meaningful scale, which has been a major obstacle for employer pools in the past.
Since 65 percent of the uninsured adults in Texas are employed, Egert further recommends targeting tax credits for employers offering benefits to “the low-income employed” as a “highly effective” way to quickly reduce the number of uninsured Texans.