1 Update: Texas Medicaid and CHIP Texas Health Care Access Conference Texas Association of Community Health Centers/Covering Kids and Families/Texas CHIP Coalition February 28, 2006 Anne Dunkelberg, Assistant Director 900 Lydia Street - Austin, Texas Phone (512) – fax (512)

2 Medicaid in Texas: Who it Helps Medicaid: As of December 2005, 2.7 million Texans were enrolled in Medicaid: 1.8 million were children –about 89,700 of these children, or 5%, were receiving disability-related Medicaid (98% of these on SSI) –about 12,500 were pregnant teens (0.7% of the kids; 0.5% of all Medicaid) –141,700 in TANF cash assistance families (5.2% of total caseload) –OTHER 1.6 MILLION predominantly in WORKING POOR FAMILIES (about 1.3 million worker-headed families, Other 20% are headed by disabled parents or living on child support from non-custodial parent) 898,500 were adults: –691,000 (77% of the adults) were elderly or disabled. Adults on SSI account for 60% of the aged and disabled recipients –Other adults: 91,500 maternity coverage; 31,000 TANF parents (1.1% of total caseload); –NOTE: there are fewer than 95,000 poor parents on Texas Medicaid- see next slide. 63,000 either TMA (Transitional Medicaid Assistance) or parents who are at or below TANF income, but not receiving TANF cash assistance Children’s Health Insurance Program (CHIP): as of September 1, 2003 — 507,259 children as of December 1, 2005 — 322,898 (drop of 184,361, or 36%)

3 Why Very Few Poor Parents are Enrolled in Texas Medicaid Texas Medicaid income cap for poor parents has not been increased by our Legislature for 20 years. Working poor parents in Texas can get Medicaid now ONLY if they earn less than the legislatively-imposed income cap of $188 per month for a family of 3 ($308 if one parent is working). This fixed dollar amount cap, does not increase from year to year with inflation. In 2006 this income cap denies Medicaid to parents with incomes above 13.6% of the federal poverty income. Forces poor parents with high medical needs to choose between work and health care; 15 hours of work per week at minimum wage ($5.15 per hour) makes them “too well off” to get Medicaid. Texas can increase the Medicaid income limit for parents to any level it chooses, without any special federal approval. The only limiting factor is our willingness to put up our state’s share (about 40%) of the costs. Today, fewer than 95,000 poor Texas parents get Medicaid, though –there are about 836,000 poor parents in the state –61% of adult Texans below poverty are uninsured –1.8 million Texas children have Medicaid coverage

4 Medicaid Cuts: What was Reversed by 2005 Legislature Adults ’ Medicaid Services Restored (eff. 10/05): –Podiatrists –Eyeglasses and Hearing Aids Mental health services (eff. 12/05) by social workers, psychologists, licensed professional counselors, and licensed marriage and family therapists. There was complication with the funding for this benefit, but it appears services by all 4 mental health provider types were restored December 1, Center for Public Policy Prioritieswww.cppp.org

5 Medicaid Cuts: What was Reversed by 2005 Legislature Soon to be restored: The Personal Needs Allowance of Medicaid nursing home residents (the monthly amount that Medicaid nursing home residents may keep from SSI, Social Security or other pension income; the rest goes to the nursing home) –was cut in 2003 from $60 to $45. –Not restored by the budget or other 2005 bill, but Gov. Perry and Senator Zaffirini pledged to ask LBB for “budget execution” to allocate the $13 million in state dollars needed to restore this. Lt. Gov. and Speaker directed HHSC 2/16/06 to restore– how soon? Center for Public Policy Prioritieswww.cppp.org

6 Medicaid Cuts: What was Reversed by 2005 Legislature Not REALLY restored: Medically Needy Spend-Down Program for Parents (Temporary Coverage for Poor Families with Catastrophic Medical Bills) –SB1 authorizes just $35 million for “partial restoration” (full restoration would cost $175 million GR for ); –AND assumes these funds DONATED by big urban hospital districts (from local tax dollars, or “IGT”) –Urban counties unlikely to do this No action so far to restore, and no indications it is likely to happen. STAY TUNED! Center for Public Policy Prioritieswww.cppp.org

7 Medicaid and CHIP provider rate cuts: –Most Medicaid and CHIP providers had rates cut in 2003: hospitals and doctors had a rate cut of 2.5%; nursing homes 1.75%, and community care providers 1.1%. –In August 2004, HHSC proposed and LBB approved keeping most of the cuts at the same level for 2005 (i.e., not making deeper cuts); but hospitals took a deeper 5% cut. –2005 legislature restored rates to 2003 levels for Community Care services and Waivers, and for ICF-MR (all at DADS), but not for doctors, other professionals, hospitals, or CHIP. Lt. Gov. & Speaker directed HHSC 2/16/06 to restore/increase nursing home rates (when?). –All other rate cuts remain. Rate cuts were the largest HHS cut made in 2003; even larger than the CHIP cuts. –TMA surveys of Texas doctors show that the percentage of doctors taking new Medicaid patients dropped from 75% in 1996 to 45% on Medicaid Cuts that Remain Center for Public Policy Prioritieswww.cppp.org

8 Community Care and Waiting Lists: funding for enrollment increases 2003 Legislature reduced numbers and/or levels of services in capped Community Care and Health programs budget provides funds to increase a number of non- entitlement programs’ enrollment For children: –MDCP increased from 977 in ’03, 983 in ’05, to 1,993 in –CSHCN increased from 1,463 in ’03, 2,114 in ’05, to 2,293 in ’07 Most Medicaid waivers, HIV Meds increased Exceptions: –CBA: was 30,279 in ’03; 26,100 in ’05; to 28,401 in ’07, –Kidney Health Program 22,834 in ’03; 21,247 in ’05; to 20,415 in ’07 –In-Home and Family Support for aged & disabled, MR still below ’03 levels (MH IHFS program eliminated in ’03 and not restored)

9 Medicaid Caseloads: Actual and Projected Actual Medicaid enrollment, December 2005 (Final “ recipient months ” enrollment averages 109% of point-in-time) 2,707,681 (final will be about 2.95 million) What HHSC estimated in 2/05 when budget process began 3,124,1103,356,597 What the LBB assumed when the budget bill was introduced (lower caseload AND cost per client) REDUCES BUDGET $930 MILLION GR 2,987,5783,137,045 Medicaid Buy-In (New Clients)2,273 Waiting List (New Clients)1,0783,196 CHIP Perinatal Subtractions (i.e., moved to CHIP)(14,386)(39,214) Medically Needy10,11810,918 Final Budget for ,986,6613,114,218 Difference, HHSC projected and budgeted in SB 1-137, ,379 Center for Public Policy Prioritieswww.cppp.org

10 WHY is she Telling Us This?? HHSC projected in 11/05 Medicaid expenditures v. appropriations shortfall of $559.4 million GR for Lion’s share is due to assumed expenditure of $444.2 million GR projected for Texas’ Medicare Part D claw- back payment. (Gov. Perry line-item vetoed this funding). Conservative (low) assumptions of caseload and cost-per-person in budget create strong likelihood that there will be a Medicaid “shortfall” in 2007.

11 CHIP Cuts, Budget Summary of 2003 CHIP changes:* Benefits eliminated: dental; vision (eyeglasses and exams); hospice; skilled nursing facilities; tobacco cessation; chiropractic services. Mental health coverage was reduced to about half of the coverage provided in 2003 Premiums and co-payments increased Coverage period reduced from 12 months to six New coverage delayed for 90 days Income deductions eliminated (gross income determines eligibility) Asset test (limit) added for those above 150% of the poverty Line (took effect August 2004) Outreach and marketing reduced *Underlined Items Restored by 2005 Legislature

12 How CHIP Fared in 2005 Session Restored: Dental, vision, hospice and mental health benefits restored to 2003 levels. Dental delayed; HHSC says will begin April Funding to replace monthly premiums with more affordable and convenient enrollment fees. Applied beginning 1/06: –No enrollment fee below 133% of the federal poverty level (FPL) (<$2,217/ family of 4 for 2006*) –$25 per family (per 6-month period) from % FPL ($2,217- $2,500/family of 4); –$35 per family (per 6-month period) from 151%-185% FPL ($2,500- $3,084/family of 4); and –$50 per family (per 6-month period) from 186%-200% FPL ($3,084- $3,334/family of 4) *HHSC will use 2006 FPL figures staring 4/1/06

13 How CHIP Fared in 2005 Session No CHIP restoration bill ever had a public hearing, not even Senator Averitt’s SB 59. Restorations made were all done via the budget. These 2003 Changes Remain: –Coverage period reduced from 12 months to six. Language in law now makes this permanent, rather than planning for a return to 12 month coverage at a future date. –New coverage delayed for 90 days. (New perinatal coverage could eliminate this for many newborns.) –Income deductions eliminated (gross income determines eligibility). –Asset test (limit) added for those above 150% of the poverty line (took effect August 2004). –Outreach and marketing were reduced in 04-05, important to monitor and push for strong investment in both in

14 Texas Child Medicaid and CHIP Combined Enrollment (January 2002-December 2005) Source: All figures from Texas Health and Human Services Commission; Compares most recent month with September 2003 Center for Public Policy Prioritieswww.cppp.org

15 CHIP Caseloads: Now and Projected September 2003 actual caseload507,259 December 2005 actual caseload322,898 decline, 9/03 to 12/05 (36%)(-184,361) HHSC 2/05 enrollment projection, if 12-month eligibility restored 386,110467,404 HHSC 2/05 enrollment projection (6 month renewal) 360,786388,920 SB 1 funded caseload, traditional CHIP (6 month renewal) 344,750351,132 Additional caseload, perinatal coverage 17,42547,498 Total, SB 1 projected CHIP caseload, traditional & perinatal CHIP 362,175398,630 Rider 57 HHSC (SB 1) requires agency to request more $$ for CHIP from LBB if needed for enrollment and benefits.

16 New CHIP Perinatal Coverage Planned Last-minute addition to the budget bill authorized this (Rider 70 HHSC). No bill, hearings, or public discussion, but HHSC had done significant lead work behind the scenes. HHSC plans start-up 9/2006. The benefit and eligibility belong to the “perinate”, not the mother. Will provide prenatal care and delivery to U.S citizen women % FPL (not quite low enough to qualify for Medicaid). ALSO will pick up mothers 0-200% FPL who do not qualify for Medicaid maternity coverage because they are either a legal immigrant or an undocumented resident. –This means that many of the covered perinates would already have been eligible for Medicaid at birth, i.e. all those with incomes below 185% FPL. –over 39,000 will be infants who would have been enrolled in Medicaid at birth under current rules, and –about 8,300 are perinates whose prenatal care would not have been covered without this option (but would have qualified for CHIP after birth). MORE DETAILS LATER TODAY! Center for Public Policy Prioritieswww.cppp.org

17 Women’s Health and Family Planning Medicaid Waiver SB 747 by Senator John Carona Texas Medicaid will provide basic medical check-ups and birth control services to adult Texas women (ages 18 and older) up to 185% of the poverty line (that’s $2,559 per month pre-tax income for a family of 3 in 2005). Currently in Texas, working mothers must live at or below 23% of the FPL to qualify for Medicaid (22% of poverty is less than $308 per month for a family of 3) and childless women can’t qualify at all – so the waiver could help many thousands of women who can’t get full Medicaid benefits. –Texas has the highest % of uninsured women aged 18 to 64 (28.3%) in the nation (the U.S. average is 17.7%) –About 40% of all Texas women live below 200% of poverty, and 50% of them are uninsured. HHSC still negotiating details with CMS, tentative September 2006 start-up. MORE DETAILS THIS AFTERNOON!

18 Medicaid Buy-in Program for Working Disabled: “MBI” SB 566 by Deuell Directs HHSC to develop/start program to allow working individuals who earn too much to qualify for Medicaid, but less than 250% FPL ($23,925/year for a single person) to pay premiums to get Medicaid coverage. Premiums amounts will depend on income level, and have 2 parts: –one is based on “unearned” income (like disability benefits) and –the other part on earned income (like wages from a job) Latest HHSC information gives September 2006 as earliest start-up. Projected to serve about 2,300 in 2007.

19 Universal Services Card & Medicaid Biometric Finger Imaging Universal Services card authorized: (SB 46, by Nelson) –HHSC can develop a single “smart card” for use both as an ID for benefits like Medicaid, Food Stamps, and TANF, as well as an “EBT” card (like the Lone Star card) –CAN include finger imaging –MUST protect client privacy –No time line announced by HHSC Statewide Expansion of Medicaid Finger Imaging authorized: (SB 563 by Janek) –HHSC can proceed to mandatory statewide use of finger image cards –Would be done in stages, and HHSC must adopt a plan for how to deal with lost and forgotten cards, who to exempt, and how to deal with “no match” situations BEFORE expanding –Project must be found cost-effective, but not clear how this will be evaluated. HHSC plans to test mandatory finger imaging in Travis, Cameron, Hidalgo in April 2006.

20 Medicaid Managed Care Statewide Expansion (PCCM, STAR+Plus, “ICM”) Since 1993, Texas Medicaid has enrolled growing numbers of clients in managed care programs. Larger cities use Health Maintenance Organizations (HMOs), while more rural areas use Primary Care Case Management (PCCM), a non-HMO managed care system that assigns every person to a primary care doctor and 2005 Legislatures expanded Medicaid Managed Care. All of Texas’ rural counties and many smaller cities now use PCCM (expanded to 197 additional Texas counties on September 1, 2005), and Austin, Dallas, El Paso, Fort Worth, Lubbock, Houston, and San Antonio offer HMO-based care. HMO care will begin in Corpus Christi/Nueces County later in 2006.

21 Medicaid Managed Care Statewide Expansion (PCCM, STAR+Plus, “ICM”) These urban areas that now have HMO-based Medicaid Managed Care will begin to also manage long term and community care services for their aged or disabled clients (through the “STARPLUS” and “Integrated Care Management” or ICM models) is earliest this is roll out. The STAR+PLUS managed long term care HMO model currently serves aged and disabled Medicaid clients in the Houston area. A new enhanced PCCM-type “Integrated Care Management” (ICM) model will be implemented in the Dallas-Tarrant service area Savings are guaranteed by allowing HHSC to cut provider rates if the new model does not produce the required savings. There are specific targets for each service area; e.g., $23.1 million for Bexar in

22 Integrated Eligibility and Enrollment HHSC contract with Accenture ( “ Texas Access Alliance ” or TAA), to take over operation of the state's eligibility and enrollment systems for Medicaid, CHIP, Food Stamps, and TANF cash assistance. TAA has begun processing CHIP and children ’ s Medicaid applications, all programs in 4 Travis and Hays offices, and is scheduled to roll out Call Center and internet operations in phases over the next year. Stay Tuned for More at the 10:15 session! Center for Public Policy Prioritieswww.cppp.org

23 Katrina and Health Care Texas’ waiver allows simplified Medicaid or CHIP eligibility for Katrina evacuees. Covers, for a one-time period of 5 months, evacuees who meet Texas’ current Medicaid or CHIP categories and income limits; plus parents (with dependent children) who have incomes as high as the federal poverty line. After 5 months, these folks can apply for regular Texas Medicaid (but most working parents will not qualify). HHSC projects about 135,000 new Medicaid clients in FY 2006 may result. Childless adults’ care thru 1/31/06 was funded from an uncompensated care pool, so some of these folks got less than 5 months of help.

24 Ways to Be Informed and Involved Go to to get on Texas CHIP Coalition listserve (be sure to read the minutes!) Go to and subscribe to CPPP’s publication, the Policy Page. for National information about Congress, the President, Medicaid and CHIP: for more technical and detailed information about Congress, the President, Medicaid & CHIP, and the federal budget & taxes: