NCPA - National Center for Policy Analysis

Texas Considers Medicaid Withdrawal

November 9, 2010

Some Republican lawmakers in Texas are proposing an unprecedented solution to the state's estimated $25 billion budget shortfall: dropping out of the federal Medicaid program, says the New York Times.

  • The Heritage Foundation estimates Texas could save $60 billion from 2013 to 2019 by opting out of Medicaid and the Children's Health Insurance Program (CHIP), dropping coverage for acute care but continuing to finance long-term care services.
  • The Texas Health and Human Services Commission, which has 3.6 million children, people with disabilities and impoverished Texans enrolled in Medicaid and CHIP, will release its own study on the effect of ending the state's participation in the federal match program at some point between now and January.

State Senator Jane Nelson, who heads the Senate Public Health Committee, said dropping out of Medicaid was worth considering -- but only if it made fiscal sense without jeopardizing care.

  • Currently, the Texas program costs $40 billion for a period of two years, with the federal government paying 60 percent of the bill.
  • As a result of federal health care changes, Ms. Nelson said, millions of additional Texans will be eligible for Medicaid.

"I want to know whether our current Medicaid enrollees, and there certainly could be millions more by 2014, could be served more cost efficiently and see better outcomes in a state run program," she said.

Source: Emily Ramshaw, "Texas Considers Medicaid Withdrawal," November 6, 2010.

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