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A historical look at the growth of Medicaid spending in Texas, showing the decline in per-recipient spending over time.

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  • 7020 Easy Wind Drive, Suite 200 Austin, TX T 512.320.0222 F 512.320.0227 CPPP.org

    Texas Medicaid Spending in Context By Eva DeLuna Castro

    The 84th Legislative Session is now well underway, with committees appointed and holding hearings on budget and

    other important policy issues. In both House and Senate budget hearings, you may have heard legislators surprised

    to hear how much Texas Medicaid spending has grown.

    When we talk about increased Medicaid spending, we have to keep in mind two things:

    Caseload growth

    Medical inflation

    Usually the information presented by the Legislative Budget Board or a state agency looks like the figure below:

    Figure 8.4 from Health and Human Services Commission, Texas Medicaid and CHIP in Perspective, Tenth Edition, February 2015.

    http://www.hhsc.state.tx.us/medicaid/about/PB/PinkBook.pdf

    Much of the growth above is a result of caseload growth, with more Texansabout 75 percent of them children

    being eligible and enrolled for the health care coverage and services paid for by Medicaid.

    The last major expansions in Texas Medicaid eligibility took place in two rounds. The first was in 1986-1991, in

    response to Congressional mandates to include low-income pregnant women and children. A decade later, in

    2001, the Legislature approved simplifying childrens Medicaid applications to make them more like the Childrens

    Health Insurance Program (CHIPs) successful process. After the red-tape barriers for eligible children were

    reduced starting in January 2002, childrens enrollment was able to grow and is now estimated to include about 84

    percent of eligible children.

    Major eligibility changes have not been made in the past decade; rather, most of the recent growth is due to a

    Texas economy with too many jobs with no (or unaffordable) employer-sponsored health insurance benefits. This

    is especially true of the jobs created since the Great Recession, beginning in late 2008.

    http://www.hhsc.state.tx.us/medicaid/about/PB/PinkBook.pdf

  • Figure 2.1 from Health and Human Services Commission, Texas Medicaid and CHIP in Perspective, Tenth Edition, February 2015.

    http://www.hhsc.state.tx.us/medicaid/about/PB/PinkBook.pdf

    Besides client growth, another important factor to take into account when looking at budget trends over a long

    period of time is inflation. Just as Texas General Revenue spending is currently lower than in 2002-03 after

    adjusting for overall population growth and inflation, Medicaid spending per beneficiary in Texas is lower when

    adjusted for medical inflation:

    http://www.hhsc.state.tx.us/medicaid/about/PB/PinkBook.pdfhttp://www.lbb.state.tx.us/Documents/Budget/Trends_Table_Post_3rd_Called_August_2013.pdf

  • Sources: Health and Human Services Commission, Texas Medicaid History Report by Federal Fiscal Year (spending excludes Disproportionate

    Share Hospital, Upper Payment Limit, Uncompensated Care, and DSRIP [Delivery System Improvement Program] funds); Medicaid recipient

    count is average monthly acute care clients by state fiscal year. Inflation is from U.S. Bureau of Labor Statistics, Consumer Price Index All

    Urban Consumers, South Urban area, Item: Medical care (not seasonally adjusted monthly figures, averaged to state fiscal year).

    The Texas Legislature has aggressively pursued Medicaid cost containment over the last 15 years, and has achieved

    results. Population growth, health care inflation, and declining affordability of employer-sponsored health benefits

    are the drivers of Texas Medicaid spending, which makes up 23 percent of Texas General Revenue budget for

    2014-2015.

    _____________________________________________________________________________________________________________________

    For More Information and/or methodology, please contact:

    Eva DeLuna Castro

    Investing In Texas Program Director

    [email protected] 512.823.2861

    About CPPP

    The Center for Public Policy Priorities is an independent public policy organization that uses research, analysis and

    advocacy to promote solutions that enable Texans of all backgrounds to reach their full potential. Learn more at

    CPPP.org.

    Join us across the Web

    Twitter: @CPPP_TX Facebook: Facebook.com/bettertexas

    mailto:[email protected]://forabettertexas.org/file:///C:/Users/gchavez/AppData/Local/Microsoft/Windows/Temporary%20Internet%20Files/Content.Outlook/RPQ1JX0R/twitter.com/cppp_txhttps://www.facebook.com/bettertexas/photos/a.207983089260425.54673.145824582142943/716105751781487/?type=1&theater


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