March 14, 2007
What will the Medicaid ruling cost Texas?

You have probably heard that the upcoming ruling by Judge William Wayne Justice in the lawsuit that will require Texas to meet its Medicaid obligations (the case is Frew v. Hawkins) might cost Texas up to $5 billion per year. (See the end of this Burka post for more.)

Well, the CPPP thinks that's scaremongering. From their analysis of the numbers (PDF):

  • To put the potential cost in context, the cost of serving all the children in Texas Medicaid is less than $5 billion (All Funds) per year, of which the state's share is less than $2 billion. Even a very ambitious and aggressive remediation order by the court, while it could require significant spending, would not plausibly double the cost of Texas children's Medicaid.

  • Improving availability of doctors for children's services would not require rate changes for services to adults, or for every category of Texas Medicaid services. To illustrate, HHSC estimates that bringing all hospital and doctors' fees up to actual cost would require about $1.5 billion [General Revenue] for the 2-year budget, but 70% of that spending or more would be for adults, and thus not required by Frew.

  • In short, while compliance with whatever corrective action plan the court ultimately requires will undoubtedly require significant new state spending, nothing supports projections of multiple billions in annual costs.

More info is here and here (both PDF). The Lege is going to wait regardless, but at least we have some idea of what the real parameters are.

Posted by Charles Kuffner on March 14, 2007 to Budget ballyhoo