The Facts
  • Medicaid is an entitlement program-Texas must provide medically necessary care to all eligible individuals who seek services as long as the state participates in the program.
  • Health and human services spending, some 70% of which goes to Medicaid, represents roughly 32% of the state budget.
  • For the 2012-13 biennium, the Legislature appropriated approximately $41 billion and will likely spend more than $47 billion in All Funds for the Medicaid program alone, making it the second largest single item in the state budget.
  • Medicaid is jointly financed with federal tax revenue and state tax revenues according to the Federal Medical Assistance Percentages (FMAP), which varies between states and usually changes from year to year. Historically, Texas pays roughly 40% of Medicaid costs and the federal government roughly 60%. But even small fractions of change in the FMAP result in significant losses or gains in the amount of federal funding that comes to the state as a result.
  • In 2009, Medicaid covered almost 3.7 million Texans, including 2.7 million children.
  • Children have increased as a percentage of total Medicaid enrollment due to the economic downturn, but the ABD population is expected to increase consistently with the aging of the Baby Boom generation.
  • In 2007, 56% of live births in Texas were paid for by Medicaid.
  • Never, in the history of the Texas Medicaid program, has state spending (general revenue) on Medicaid declined from one year to the next. Only in 1982 did total Medicaid spending decline from the previous year as the result of reductions at the federal level.
  • Texas should reject federal funds for the purpose of expanding Medicaid
  • The state should continue to pursue Medicaid funding block grants, in order to give the state greater certainty in the Medicaid budget from year-to-year, as well as greater flexibility to run the program. This includes petitioning the state’s Congressional delegation to represent these needs in the U.S. Congress.
  • Texas should apply for a waiver to use a sliding scale that ties the out-of-pocket cost of medical care to the recipient’s income.
  • The state should also reject efforts to extend the period of Medicaid eligibility-including eligibility for children’s Medicaid benefits.