TPPF Presents Plan to Reform Medicaid With Block Grant.
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By Becca Aaronson
In a report released Wednesday, the Texas Public Policy Foundation
detailed how Texas could use a federal block grant to cut costs and
fundamentally reform Medicaid, the state’s health program for the
poor, without expansion.
“This report is a blueprint for reform so that Medicaid can
fulfill its promise to the neediest [Texans] and right now, it does
not,” said Arlene Wohlgemuth, executive director of the
conservative think tank. “What it is not is a blueprint for
expansion under Obamacare.”
Although proposals to reform Medicaid with a block grant are
preferred by many Republican legislators, most acknowledge that Texas is
unlikely to receive a “no strings attached” block grant from
the Obama administration. But all parties agree that Texas – which has
the highest rate of uninsured in the nation and spends a quarter of the
state budget on Medicaid – needs to reform health care delivery for
1) n. a person so poor and needy that he/she cannot provide the necessities of life (food, clothing, decent shelter) for himself/herself. 2) n. one without sufficient income to afford a lawyer for defense in a criminal case.
In “Save Texas Medicaid: A Proposal for Fundamental
emphasizes the use of a block grant to let the
state subsidize private health savings accounts so that Medicaid
recipients can pay for
Managed care The benefits covered under a health contract
. The reform plan it outlines
would switch Medicaid from a defined benefits model to a defined
, Medicaid recipients would either enroll in a
Medicaid managed care plan or be given subsidies on a
A scale in which indicated prices, taxes, or wages vary in accordance with another factor, as wages with the cost-of-living index or medical charges with a patient’s income.
based on their income level. Those subsidies would be put into a
to be used to pay for Medicaid recipients’ health
care services. The state could also attach “personal
responsibility” measures to the subsidies as disincentives for
improper use of care, Wohlgemuth said. For example, she said that if
Medicaid recipients unnecessarily went to the emergency room, they could
have to pay a higher co-payment or deductible.
“Gov. Perry has long advocated for block grant funding. States
need the freedom to tailor health care delivery in a manner that best
suits the needs of their populations and to implement common sense
initiatives that fundamentally change the culture of government
dependence,” Lucy Nashed, a spokeswoman for the governor’s
office, said in an email. She added the TPPF “proposal should be
part of the conversation as we continue pushing the federal government
to provide flexibility.”
Texas GOP lawmakers have overwhelmingly rejected the option of
Medicaid expansion as directed by the Affordable Care Act, but there is
discussion within the Legislature to craft “a Texas solution”
to Medicaid reform that would allow the state to draw down billions in
federal financing to expand Medicaid coverage.
In the current system, Texas receives roughly $60 in federal
for every $40 the state spends on Medicaid services. If
Texas reached an agreement with the federal government to finance
Medicaid through a block grant, the state would receive a predetermined
amount of federal financing to run the program. In comparison, if the
state expanded Medicaid under the federal Affordable Care Act, the
federal government would cover 100 percent of Medicaid expansion
enrollees’ health care services for three years, then slowly reduce
the matching rate to 90 percent.
Billy Hamilton, the state’s former chief revenue estimator and
former deputy state comptroller, estimates the Medicaid expansion would
cost Texas $15 billion over 10 years, while allowing Texas to draw down
$100 billion in federal financing. With extra federal money coming in,
Medicaid expansion could offset $1.2 billion in the 2014-15
n. pl. bi·en·ni·ums or bi·en·ni·a
A two-year period.
[Latin : bi-, two; see bi-1 + annus, year; see at-
budget that Texas would spend on other health programs to cover poor
populations, Hamilton estimates. (These Texas Tribune interactives show
the economic impact of the Medicaid expansion by legislative district,
and the effects on
n health care services provided by a hospital, physician, dental professional, or other health care professional for which no charge is made and for which no payment is expected.
and the rate of uninsured by
county, according to Hamilton’s estimates.)
Gov. Rick Perry has supported proposals to reform Medicaid with a
block grant, while maintaining that Texas should not expand Medicaid
under the Affordable Care Act.
The governor’s office is “of the opinion that a block
grant would be the ideal waiver, and I would agree with that – I just
don’t have a lot of confidence in that [happening],” said Rep.
John Zerwas, R-Simonton, who authored House Bill 3791 to set conditions
for any agreement Texas may reach with the federal government to expand
Medicaid under the Affordable Care Act. HB 3791 requires that any
agreement to expand Medicaid would allow the state to tailor Medicaid
benefits, and enhance cost-sharing by implementing “personal
responsibility” measures, such as co-payments or deductibles. It
also includes a severability clause that ends the agreement if the
federal government reduced its share of Medicaid expansion
While Perry hasn’t wavered in his opposition to Medicaid
expansion, other Republican-led states have reached compromises with the
federal government to potentially expand Medicaid. In Arkansas, for
example, the federal government has agreed to allow the state to offer
subsidies for Medicaid expansion enrollees to purchase private coverage
through an online health insurance exchange that would be set up under
the Affordable Care Act. For its part, the state must ensure that
Medicaid expansion recipients can still receive any benefits offered by
traditional Medicaid that are
Health care adjective Referring to a procedure, test or other health service to which a policy holder or insurance beneficiary is not entitled under the terms of the policy or payment system–eg, Medicare. Cf Covered.
in the subsidized private
health plans through the state’s program.
“Arkansas’ deal was really a pretty bad deal,” said
Wohlgemuth. She said that in order for Texas to receive a block grant
and switch to a defined contributions plan – rather than a defined
benefits plan – the federal government would have to approve legislation
allowing states to opt out of Title XIX of the Social Security Act,
which mandates states to provide certain benefits through Medicaid.
“In order to stabilize program costs and ensure the state can
fulfill its responsibility to current Medicaid enrollees over the long
term, systematic reform is required at both the state and federal
level,” she said.