Texas can lead the way on Medicaid reform

From chron.com, By Arlene Wohlgemuth, Updated 08:00 p.m., Wednesday, February 22, 2012 –

The Houston Chronicle‘s Sunday’s editorial on Medicaid accurately described the hope that the new 1115 waiver will help hospitals and other health care providers achieve better health outcomes by reforming the way they are paid.

But that reform’s anticipated savings in the next budget are insignificant compared to the $10.5 billion in new state revenue that will be required to pay for Medicaid.

This exemplifies the state’s dilemma. The innovation allowed under today’s Medicaid program will never come close to closing the gap for the demands on state tax dollars for this federal health care program for the poor. Medicaid is in desperate need of overhaul.


Much like welfare before the 1990s overhaul, Medicaid is poorly designed, with counterproductive incentives and replete with waste, fraud and abuse. But unlike welfare, the state pays a large share of Medicaid’s skyrocketing costs. It is time for Texas to push back against Medicaid’s oppressive requirements.

Nationwide, Medicaid has replaced K-12 education as the largest item in many state budgets. In Texas, Medicaid has grown 113 percent in the last decade alone and is on track to double costs every 10 years through 2040. For years, governors have begged for relief from the federal government, to no avail.

The Texas Legislature took a bold step last year, voting to request a block grant from the government that would give Texas the flexibility to completely redesign the program. Our research demonstrated the potential benefit that both Texas taxpayers and Medicaid recipients could receive.

For example, the state could provide or help provide insurance coverage for more than twice as many Texans as in the current program for 95 percent of the money spent four years ago by simply providing a subsidy, based on a sliding scale, to purchase an individual insurance policy. That plan made no changes to services for the currently aged, blind or disabled, but allowed for changes to be made for future enrollees, giving them choices in care.

The block grant proposal also provided an additional $2 billion for administration. The point is that there is more than enough money in the system, if only it were spent more wisely.

When the Legislature returns in January, its first order of business will be to find $3.9 billion in state revenue to pay for the rest of its share of Medicaid for 2013. Then, assuming Obamacare remains in effect, it will have to figure out how to pay for the $10.5 billion increase in the state’s share for the next two years. The tab would still be $6.2 billion if Obamacare winds up being discarded by Congress or the U.S. Supreme Court.

Decision time for continued participation in Medicaid may occur as early as January 2013, and will almost certainly happen by the following legislative session. What remains to be seen is whether the Legislature will leverage this brief window of opportunity. Block grants were discussed in Congress several years ago, but the talk died down when no action was taken. U.S. Rep. Paul Ryan, R-Wis., recently revived the discussion, throwing a lifeline of hope to the states.

Texas has the opportunity to lead the reform movement by pursuing the waiver for an aggressive block grant as envisioned in the legislation. There is much at stake, and one cannot overstate the importance of the outcome from the Legislative Oversight Committee, which will be meeting soon to discuss the block grant. This is an opportunity to push for change that will not only rescue taxpayers but also provide better care for recipients. Committee members must accept the challenge to think outside the box of 1960s-era Medicaid and develop an alternative that recognizes the evolution and advances in health care over the last five decades and charts a new course for the future.

The block grant should not be crafted as a waiver request acceptable to the entrenched bureaucracy in Washington, but rather as an opportunity to write a blueprint for Congress to fundamentally reform the Medicaid program.

Visionaries are needed. If Texas will not define the vision and fight for it, who will?

Wohlgemuth is the executive director of the Center for Health Care Policy at the Texas Public Policy Foundation. She served 10 years in the Texas House of Representatives, specializing in health care issues.

5 responses

  1. Senator-Blutarksy

    If our Republican “heroes” who controlled all 3 branches of government from 2001-2009, had done something effective to control the border, maybe Medicaid would not be in such bad shape. Adding several MILLION illegals to the situation, has had dramatic negative results, just in Texas.

    GW Bush said SEND EM ON ” Family values do not stop at the border…”

    Then they had the unmitigated gall to run Juan McCain – co-author with Ted Kennedy of the 2006 Amnesty Bill, as their nominee ???

  2. Here, here something we agree on totally. this does not stop with Medicaid, schools, city/county services, Food stamps, Housing assistance,employment, Jose illegal has it all and his money too.

    1. Senator-Blutarksy

      Stan……all correct, plus……..then the toogs in Austin tell us our highways are too crowded and we need to put toll roads everywhere. I told our 2 (basically useless) “public servants” in Austin that the roads might be a lot less crowded if we took the illegals off the road.

      And there might be a few more jobs for legal citizens too.

      Funny how they talk about all this “growth” we are having. I would venture to say an overwhelming percent might be from south of the Rio Grande, and here to suck up every possible “service”. What good is “growth” if it is crippling all our services and facilities ? We do not need THAT KIND of growth?

      From 2010 census, both Dallas & harris counties have only 33% anglo population and hispanic is in upper 40s for each.

      We have been sold out from the courthouse to the White House. The Reconquista is in full-speed-ahead mode.

  3. Have talked with both reps, dewhurst,and numerous others. none want to address the issue head on, they blame it on the federal government, which I would not let them get away with because their buddy bush didn’t do anything in 8 years as pres or as gov prior to that. No answers but a lot of stuttering, and slipping away.

  4. Senator-Blutarksy

    Stan – you will love this- an illegal is running for student body prez of the Agroids


    They just flaunt it in everyones’ face…………

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