1. Update: Children’s Health Care and More
900 Lydia Street - Austin, Texas 78702
Phone (512) – fax (512)
Update: Children’s Health Care and More
The University of Texas at Austin
LBJ School of Public Affairs
February 14, 2006
Anne Dunkelberg, Assistant Director

2. Texas’ Health Insurance “System”
US Census Bureau Statistics:
Approximately 5.6 million Texans uninsured in 2004
25.1% of Texans of all ages were uninsured
27.6% of Texans under age of 65 were uninsured
Another three million Texans covered by Medicaid or CHIP
Why are so many Texans uninsured?
Low percentage of employer-sponsored insurance (ESI)
9% below national average for < 65 (54.2%, vs. 63.2%)
9.3% below national average for <18
Approximately 83% of Texas Medicaid recipients are below poverty
Only 14.5% of Americans below poverty have ESI

3. Texas’ Health Insurance “System”
All incomes, under age 18 (0-17; raw Census CPS for 2004)
21.4%
1.35 million
All incomes, under age 18 (0-17*; 3-year average Census CPS)
21%
1.32 million
All incomes, under age 19 (0-18*; 3-year average Census CPS)
1.39 million
< 200% FPL; under age 19 (0-18; raw Census CPS for 2004)
30% of <200%; 14.4% of all kids
948,000
In other words, 2/3 of uninsured Texas children are below 200% FPL, despite public coverage options.
Texas is home to an estimated 230,000 undocumented kids and another 160,000 legal immigrant (LPR) children under age 18 (Pew Hispanic Center).
The LPR kids can participate in CHIP.
Clearly, undocumented children are just a small part of our uninsured problem
About 700,000 (half) of our uninsured kids could enroll in Medicaid or CHIP!
Kids Count 3-year average: million aged 0-18; million aged 0-17

4. Medicaid in Texas: Who it Helps
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%)

5. 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

6. Texas Medicaid: Who it Helps
December 2005, HHSC data.
Total enrolled 12/1/2005: 2,707,681

7. 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, 2005.
Center for Public Policy Priorities

8. Medicaid Cuts: What was Reversed by 2005 Legislature
Might be restored (but no action yet!):
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 have pledged to ask LBB for “budget execution” to allocate the $13 million in state dollars needed to restore this.
Scheduled LBB meeting (9/05) delayed due to hurricanes Katrina and Rita; none scheduled since, STAY TUNED!
Center for Public Policy Priorities

9. Medicaid Cuts: What was Reversed by 2005 Legislature
Not exactly restored:
Medically Needy Spend-Down Program for Parents (Temporary Coverage for Poor Families with Catastrophic Medical Bills)
HHSC estimated that full restoration of MN would cost $175 million GR for ; SB1 authorizes just $35 million for “partial restoration” AND assumes this will be funded entirely by voluntary contributions of local tax dollars (“IGT”) from the big urban hospital districts
Also says $20 million GR could be added to this IF the local funds are provided first (the $20 million would come from savings achieved due to the Women’s Health and Family Planning Waiver, more later on this)
No action so far to restore, and no indications it is likely to happen. STAY TUNED!
Center for Public Policy Priorities

10. Medicaid Cuts that Remain
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 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.
All other rate cuts remain. Rate cuts were the largest HHS cut made in 2003; much larger than the CHIP cuts.
Center for Public Policy Priorities

11. Income Caps for Texas Medicaid and CHIP, 2006
$21,708
$33,200
$30,710/yr
$30,710/yr
$22,078/yr
222%
200%
$16,600
$7,236
185%
185%
$2,256
$3,696
133%
100%
74%
13.6%
22.3%
Income Limit as Percentage of Federal Poverty Income
Annual Income is for a family of 3,
except Individual Incomes shown for SSI and Long Term Care

12. 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 2007.
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)

13. Medicaid Caseloads: Actual and Projected
Actual Medicaid enrollment, May 2005
(Final “recipient months” average 104% of point-in-time enrollment, after retroactive coverage is included)
2,686,699
(equals about 2,794,167 recipient months)
2006
2007
HHSC 2/05 estimated, (6-month coverage for children)
3,124,110
3,356,597
Introduced version, SB 1 (6-month coverage of children) REDUCES BUDGET $930 MILLION GR
2,987,578
3,137,045
Medicaid Buy-In (New Clients)
2,273
Waiting List (New Clients)
1,078
3,196
Perinatal Subtractions (i.e., moved to CHIP)
(14,386)
(39,214)
Medically Needy
10,118
10,918
Final Budget,SB1 (6-month coverage of children)
2,986,661
3,114,218
Difference, HHSC projected and budgeted in SB 1
-137,449
-242,379
Center for Public Policy Priorities

14. HHSC projected in 11/05 Medicaid expenditures v
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’ Part D claw-back payment. (Gov. Perry line-item vetoed this funding).

15. CHIP Cuts, 2004-05 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

16. 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 2006.
Funding to replace monthly premiums with more affordable and convenient enrollment fees. To be applied beginning 1/06:
No enrollment fee below 133% of the federal poverty level (FPL) (<$2,145/ family of 4)
$25 per family (per 6-month period) from % FPL ($2,145-$2,419/family of 4);
$35 per family (per 6-month period) from 151%-185% FPL ($2,420-$2,983/family of 4); and
$50 per family (per 6-month period) from 186%-200% FPL ($2,984-$3,225/family of 4)

17. How CHIP Fared in 2005 Session
None of the CHIP restoration bills 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

18. 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 Priorities

19. CHIP Caseloads: Now and Projected
2006
2007
September 2003 actual caseload
507,259
October 2005 actual caseload
322,898
decline, 9/03 to 10/05 (36%)
(-184,361)
HHSC 2/05 enrollment projection, if 12-month eligibility restored
386,110
467,404
HHSC 2/05 enrollment projection (6 month renewal)
360,786
388,920
SB 1 funded caseload, traditional CHIP (6 month renewal)
344,750
351,132
Additional caseload, perinatal coverage
17,425
47,498
Total, SB 1 projected CHIP caseload, traditional & perinatal CHIP
362,175
398,630
Rider 57 HHSC (SB 1) requires agency to request more $$ for CHIP from LBB if needed for enrollment and benefits.

20. New CHIP Perinatal Coverage Planned
Last-minute addition to the budget bill authorized this (Rider 70 HHSC). No previous bill or public discussion, but agency 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 women % FPL (who make too much 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.
Center for Public Policy Priorities

21. New CHIP Perinatal Coverage Planned
At some point before or at the first birthday, Medicaid-eligible children will be switched back to that program.
Of the nearly 48,000 perinates per month projected in FY 2007, over 39,000 are infants who would have been enrolled in Medicaid under current rules, and about 8,300 are perinates who would not have been covered without this option.
7 states have these programs (AR, IL, MA, MN, MI, RI, WA); all but AR provided prenatal care to immigrants with state dollars before the CHIP program.
Some controversy because (1) created under federal rule (not law) and (2) gives “person” status to the unborn.
Center for Public Policy Priorities

22. 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 $2,481 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 (23% 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 .

23. Women’s Health and Family Planning Medicaid Waiver
Services covered will include:
well-woman exams,
counseling and education on contraceptive methods,
provision of contraception,
screenings for diabetes, breast and cervical cancer, sexually transmitted diseases, hypertension, cholesterol and tuberculosis,
risk assessment and referral of medical problems to appropriate providers.
It is against federal and state law to use Medicaid funds for abortion, and SB 747 specifically excludes abortion providers.
The bill also excludes coverage of emergency contraceptives.
Outreach will be critical once the program starts, so STAY TUNED!!

24. 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.

25. 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
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.

26. Medicaid Managed Care Statewide Expansion (PCCM, STAR+Plus, “ICM”)
Primary Care Case Management:
PCCM expanded to 197 additional Texas counties on September 1, 2005
Some Medicaid clients who do not live in a PCCM expansion county were enrolled in PCCM by mistake (should be fixed by now).
Date for clients to pick a PCP was extended to November 11.
a referral from the client's PCP was not required until December. To keep up with ongoing issues with PCP assignment & selection, a Primary Care Provider Change List is updated daily on the TMHP website.
PCCM Client Helpline

27. Medicaid Managed Care Statewide Expansion (PCCM, STAR+Plus, “ICM”)
The STAR+PLUS managed long term care HMO model serves aged and disabled Medicaid clients in the Houston area.
New state laws and the state budget assumed savings from greater management of care for aged, blind and disabled Medicaid clients, via three models of care:
a modified STAR+PLUS HMO model, a new Integrated Care Management approach, or primary care case management
reduces Medicaid funding by $109.5 million GR
A new enhanced PCCM-type “Integrated Care Management” (ICM) model will be implemented in the Dallas-Tarrant service area
Where an HMO-style STAR+PLUS model is used, the state will modify the model to protect federal “UPL” payments to local public hospitals.
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

28. Integrated Eligibility and Enrollment
June 30, HHSC announced 5-year, $899 million 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.
Local offices will drop from 381 DHS offices to 167 full-service offices and 44 “satellite” offices open on certain days only; the state will close 99 eligibility offices.
Four call centers will provide assistance from 8 a.m. to 8 p.m., will receive and process applications, and consumers will be able to track their applications through an automated phone system.
The primary number for assistance will be 2-1-1; calls for eligibility services will be routed to TAA (not the 211 call centers).
Center for Public Policy Priorities

29. Integrated Eligibility and Enrollment
Eventually will be able to apply through the Internet, over the phone and by fax or mail.
Over 10,000 DHS state eligibility workers in 1997; reduced to 2,900 in IEE (counting the 600 out-stationed workers)
Call centers will employ about 2,500 (total system = about 5,400)
The transition to the new office structure began in January and will be phased in over a 10-month period.
First step was takeover of CHIP enrollment in November (from current contractor, ACS);
New child Medicaid and CHIP apps all going to “TAA”
RGV will be last (September 2006, if on schedule).
Many computer, training, staffing problems are troubling the transition so far; child Medicaid enrollment dropped by 29,000 from November to December.

30. Katrina and Health Care: Texas So far
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.
A major exception is that the disaster coverage is available to parents (with dependent children) who have incomes as high as the federal poverty line (FPL; $1,341 per month for a family of 3 in 2005), compared to regular Texas Medicaid, which only covers parents up to 23% FPL (about $308 per month for a family of 3, or even less if the parent is not working).
Childless adults are not included in this Medicaid coverage, but costs for such adults were paid for under an uncompensated care pool, thru 1/31/06.

31. Katrina and Health Care: Texas So far
Evacuees (except the childless adults) can get their 5 months of Medicaid coverage any time between September 1, 2005 and June 30, 2006, as long as they apply by January 31, 2006.
There are no asset limits, and no premiums or co-payments required.
Benefits include what Texas Medicaid and CHIP now cover; including mental health services.
HHSC says the pool will pay for care to all evacuees (if not covered by Medicaid) up to 200% FPL, for services delivered between 8/24/05 and 1/31/06.
HHSC reported only 9,028 waiver enrollees as of 10/21?? but that number should increase.
After 5 months, these folks can apply for regular Texas Medicaid (most working parents will not qualify). HHSC projects about 135,000 new Medicaid clients in FY 2006 may result.

32. Congress passes Medicaid Cuts, Changes in FY 2006 Budget Reconciliation
Cuts do NOT reduce deficit, as tax cuts that are part of the “Budget Reconciliation” package EXCEED the spending cuts
Senate and House had VERY different budget cut bills; House dominated final bill on HHS issues.
Cut Medicaid by $4.7 billion over 5 years ($26.4 billion over 10 years)
Mandatory Provisions:
Requirement to verify citizenship: Beginning July 1, 2006, all citizens applying for Medicaid have to submit passports or naturalization papers or birth certificates and other proof of identity to prove that they are citizens.
Changes in the treatment of asset transfers by individuals needing Medicaid coverage for long-term care services.
Optional provisions:
New state authority to impose co-payments and premiums:
prescription drugs and non-emergency use of the emergency room for all groups, all incomes;
allows states to implement co-payments up to 10% of the cost of the service to clients with incomes %; above 150% FPL can be charged up to 20% of the cost of the service. Children, pregnant women, BCCTP exempt.

33. Congress passes Medicaid Cuts, Changes in FY 2006 Budget Reconciliation
New state authority to provide scaled back benefit packages for some groups of beneficiaries
Children < 133% FPL must get the full EPSDT benefits, tho some worry about wrap-around approach
states may amend their state Medicaid plans to establish new benefit packages modeled on commercial health insurance coverage for higher-income, non-disabled, non-elderly adults (probably no one in current Texas program)
New state authority to establish Health Opportunity Accounts (HOAs??!) for some beneficiaries
up to 10 states
Clients can be responsible for up to 10% of deductible
COSTS the bill $261 million/10 years

34. Congress passes Medicaid Cuts, Changes in FY 2006 Budget Reconciliation
CBO:
80 percent of the budget cuts that result from Medicaid co-payment increases would come from enrollees who do not receive the health care they need because they can't afford the co-payments-- not from the collection of increased co-payments
65,000 individuals would lose Medicaid coverage entirely because they will be unable to afford new premiums. Children will account for 60 percent of the individuals who are unable to pay their premiums and are therefore denied Medicaid coverage.
Around 15 percent of new Medicaid nursing home coverage recipients each year would ultimately face delays of up to one year in obtaining coverage as a result of the new rules.

35. Ways to Be Informed and Involved
Go to and subscribe to CPPP’s publication, the Policy Page.
Go to to get on Texas CHIP Coalition listserve (be sure to read the minutes!)
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: