Health Care Briefing Health Care Briefing University of Texas at San Antonio November 17, 2006 Eva DeLuna Castro, Senior Budget Analyst

Outline Health insurance coverage data Highlights of CPPP/MHM June 2006 report, Texas Health Care Prospects for the 80 th Legislative Session

All age groups combined: 25% uninsured, the worst rate in the nation

How Does Immigration Factor In? Immigrants NOT the main cause of our last-place ranking –Texas is home to 2.4 million non-citizens (legal residents & undocumented persons); 1.3 million are uninsured (55% of non-citizens) –BUT! Removing non-citizens from the equation, Texas would still be tied with New Mexico for last place at 20.6% uninsured (4.2 million Texans), even if you left the non-citizens in NM’s rate. (Without immigrants, New Mexico’s rate drops to 18.9%)

Of million uninsured kids (TX average), about 919,000 are below 200% of poverty. Excluding undocumented kids (230,000), this means 689,000 more children could be reached by Medicaid or CHIP.

Bexar County’s Economic Indicators (from American Community Survey) No significant improvements in poverty; low-paying jobs are unlikely to provide health insurance. Unemployment Rate: 6.6% in 2005 Poverty rate, all ages: 17% in 2005 Child Poverty Rate: 24.1% in 2005

What Has Happened and What Work Remains Texas Health Care:

2005 Session Gains for Medicaid: Restoration of coverage of podiatry services, eyeglasses, hearing aids, and mental health services for adults; New Buy-In program for working adults with disabilities New health “waiver” to provide basic preventive check-ups (such as diabetes, breast/cervical cancer) and family planning services to low- income women (up to 185% of poverty, ages 18 to 44) Medicaid Cuts Still in Effect: Medically Needy Spend Down Program for Parents; Rate cuts for many Medicaid and CHIP health care providers (about $740 million over two years) Other Medicaid Challenges: Covering working-poor parents up to the poverty line ($16,600 for family of 3); for women’s health waiver, outreach is needed, as well as a way to provide follow-up care for illnesses not covered by Medicaid

Source: Texas Medical Association Survey, Reported by Dallas Morning News. Texas Physicians Less Likely To Accept New Medicaid Patients Accept no new Medicaid patients Limit new Medicaid patients Accept all new Medicaid patients Percent of physicians surveyed

2005 Session Gains for CHIP: Restoration of dental, vision (eyeglasses and exams), hospice, and mental health benefits that were cut in 2003 Instead of monthly premiums instituted in 2003 session, families will pay an enrollment fee ($25 to $50) once every six months. Families below 133% of poverty exempt from fees. New prenatal care and health coverage for newborns CHIP Cuts Still in Effect: 2003 policy changes requiring more frequent re-enrollment; asset test (savings, vehicles, etc.) for families above 150% of poverty; 90-day waiting period; income deductions for child care and child support expenses are no longer allowed; rate cuts Other CHIP Challenges: Outreach (especially for new prenatal program); future federal funding

2005 Session Gains for Public Health, Safety, Mental Health, and Prevention Programs: Funding and caseloads increased for immunizations, HIV drug program, newborn screening, and County Indigent Health Care (state grants to counties that fund health care for the impoverished) Increased funding for Children with Special Health Care Needs (seriously ill/medically fragile); 1,463 clients receiving medical services in 2003 versus 2,897 by 2007 More funding for substance abuse services and staffing levels/facilities repairs at state mental hospitals Cuts Still in Effect: County Indigent Health Care, along with other programs such as Kidney Health, Primary Health Care, and Community Mental Health services for adults & children, are still below pre-2003 funding levels Other Challenges: Potential impact of “10% Cut in General Revenue” budget instructions for ; future federal funding

If 10% cuts are enacted by 80 th Legislature

2005 Session and Privatization/Outsourcing of Eligibility Determination for Safety Net Programs: HHSC was directed to change the way Texans apply for public benefits, including Medicaid, CHIP, Food Stamps, and cash aid (Temporary Assistance for Needy Families) June 2005: 5-year, $899 million contract signed by Accenture (Texas Access Alliance, or TAA), to operate & revamp eligibility and enrollment systems. Instead of 310 local offices, there would be 167 full-service offices and 44 “satellite” offices open on certain days only; 99 offices would close. Four call centers to provide assistance from 8 AM to 8 PM and receive and process applications; consumers could track applications through an automated phone system. Primary number for assistance would be 2-1-1; calls for eligibility services routed to TAA (not the call centers). Major Problems/Declines in Enrollment Lead to a Delay in Further Implementation of New System CHIP enrollment taken over by Accenture in Dec. 2005; in Jan. 2006, new system for TANF/Food Stamps/Medicaid launched in Travis & Hays counties

Texas CHIP Enrollment Source: Texas Health and Human Services Commission *Sept. ’03 is the beginning of the state fiscal year in which CHIP cuts/policy changes started taking effect. High: May ’02: 529,271 Sep. ’03*: 507,259 Nov. ’06: 321,341

Recent Declines in Texas CHIP Enrollment December 2005 October 2006 Decline, December to October State total322, ,685-22, % Bexar 20,91519,202-1, % Cameron 7,8148, % Dallas 33,32531,848-1, % El Paso 13,62812,009-1, % Harris 65,46558,711-6, % HAYS 1,4891, % Tarrant 19,75419, % TRAVIS 8,5508, % Webb 5,2795, % Source: Texas Health and Human Services Commission

Texas Child Medicaid and CHIP Enrollment Sources: Enrollment from Texas Health and Human Services Commission; Texas State Demographer's 0-17 Population Estimates Sept. ’03: 2,150,543 Oct. ’06: 2,020,710 Estimated child population growth of almost 70,000 per year Combined CHIP/Child Medicaid Enrollment

Declines in Texas Children’s Medicaid Enrollment December 2005October 2006 Decline, December to October State total 1,838,2391,720, , % Bexar 139,682133,204-6, % Cameron 64,33962,992-1, % Dallas 182,954170,054-12, % El Paso 98,31989,265-9, % Harris 316,896291,991-24, % HAYS 4,9535, % Tarrant 97,90889,483-8, % TRAVIS 52,66749,267-3, % Webb 36,47332,746-3, % Source: Texas Health and Human Services Commission. November preliminary enrollment has increased.

Want more information on privatization of eligibility determination? See CPPP report released earlier this week (free on our website)

Improving/Protecting Health Care Access in Cover Texas children Expand access to Medicaid for poor parents Improve Medicaid access and quality by adequately paying health care providers Ensure that revamped/privatized eligibility system doesn’t impede access to Medicaid and CHIP All of the above require adequate state tax revenue (currently 50 th per capita) to draw down federal funds

WHAT TEXAS SPENDS And How Much More It Would Cost to be “Average” State “Own Source” Budget, : $94 Billion If state spending per Texan equaled the U.S. average, this budget would increase to $142 billion

‘CURRENT SERVICES’ FOR ? “Own Source” Budget: at least $108 Billion

INCLUDED IN ‘CURRENT SERVICES’ FOR Don’t Make the 10% Cuts [Almost half a billion dollars in General Revenue for HHS agencies Combined]: HHSC $72 million/550 workers; Aging & Disability, $112 million/298 workers; Family & Protective Services, $40 million/Major cuts to prevention services; State Health Services, $236 million/693 workers; Assistive & Rehabilitative Services, $13 million/168 workers HHSC needs $783 million General Revenue base increase, plus $1.8 billion GR “above the base” (“exceptional items”) to address inflation/cost increases in Medicaid and CHIP. (Baseline holds costs at fiscal 2006 level.) Medicaid: base allows for modest caseload growth, from million in fiscal 2007 to million by 2009 CHIP: Enrollment assumed to cap at 339,000 in 2009

BEYOND ‘CURRENT SERVICES’ (additional General Revenue needed) Restoring health care provider rates to 2003 Levels: $237 million for Medicaid and CHIP rate restoration; $11 million for long-term care and other providers of Aging & Disability Services; $3 million for State Health Services health care providers HHS program expansions/improvements: almost $1.1 billion in GR $255 million to reduce community care waiting/interest lists $54 million for private urban hospital upper payment limit (UPL) program; $117 million to replace nonrecurring intergovt transfers; $53 million for hospital financing; $81 million for Graduate Medical Education $82 million to provide mental health community crisis services for children and adults $32 million to address nursing/other health care professional shortages $23 million to reduce spread of HIV and tuberculosis More info: Texas Health and Human Services Consolidated Budget Fiscal (on HHSC website)

KEY STAGES IN JANUARY 2007 Legislative Budget Board will release “starting point” for budget Governor’s Budget Office may also release a detailed budget, mentioning his program initiatives New Comptroller of Public Accounts will issue a revenue estimate for the budget cycle; may also issue a new economic forecast (latest one is from Spring 2006) that changes the revenue estimate for fiscal 2007 House and Senate committee assignments will be made

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