Accounting for nearly a third of Texas’ budget, Medicaid is a federally mandated program that is a fiscal time-bomb threatening the state’s budget. For more than a decade, state lawmakers have known that the liabilities could be off-set but have hid behind the specter of Democrats running Washington to avoid getting the job done.
That excuse will be gone in late January. With Republicans now controlling every level of government, they can no longer blame the pesky Democrats. From the White House to both chambers of the federal legislative branch, to the governorship to every statewide office to both chambers of the Texas Legislature, Republicans run everything.
And, in 2017, those same Republicans can run from nothing.
Any major reforms left undone at the end of the 2017 legislative session will be so because Republican elected officials didn’t want to do them. They cannot hide behind Democrats in Austin – the GOP controls nearly two-thirds of both legislative chambers – or Democrats in Washington, DC.
That includes efforts designed to save billions of dollars in the Medicaid program.
As explained by Ballotpedia, Medicaid was established in 1965 to provide:
medical insurance to groups of low-income people and individuals with disabilities. Medicaid is jointly funded by the federal government and the states, though Medicaid eligibility, benefits and administration are managed by the states within federal guidelines.
Despite a push by Democrats and liberal Republicans in the Texas House, taxpayers avoided seeing Medicaid expanded under the failed ObamaCare scheme. Yet Medicaid costs continue to grow at an alarming pace.
In fiscal year 2015, Medicaid – the single program – represented 30.1 percent of all state spending. In contrast, all education spending accounted for just under 40 percent of the state’s budget.
The problem with Medicaid is that the “federal guidelines” mentioned above end up restricting the ability of Texas to design the program to meet the real needs of real people… thereby driving up the costs.
For a long time, Republican officials have acknowledged those Medicaid costs could be brought under control – even reduced – through a “block grant.” Put simply, a block grant is the federal government handing over a set amount of funds allocated for the state to achieve the program goals, but without the federal strings and management requirements that otherwise come attached.
As two years ago by explained by researchers at the Texas Public Policy Foundation, a block grant would have saved taxpayers $4 billion in 2015 alone, and the savings could “exceed $6 billion in 2023 relative to official state projections.”
That’s some savings.
The most common excuse the last eight years has been that the Obama Administration wouldn’t go along with it. Before that, the excuse was that Nancy Pelosi and Harry Reid – the Democrats running the US House and Senate, respectively – would block such efforts.
Appearing on a national news program, Gov. Greg Abbott praised President-elect’s nomination for Secretary of Health and Human Services, saying it could mean faster approval for “block grant authority.”
Abbott’s press secretary, John Wittman, expounded on that for Texas Scorecard:
Texas will work proactively to liberate our Medicaid program that is being weighed down by burdensome federal regulations. By eliminating the maze of mandates, the state will have the flexibility to create a more efficient system which will produce better outcomes and services for enrollees.
Texas State Sen. Charles Schwertner (R-Georgetown) is chairman of the Health and Human Services Committee and supports having Congress block grant Medicaid to the Lone Star State. Yet that requires having Congress passing legislation doing so.
“Texas has a ‘transformation’ 1115 waiver but should continue to push for even greater flexibility in our Medicaid program by submittal of an expanded waiver,” said Schwertner. “This could be approved by executive federal action.”
Deane Waldman, MD, heads TPPF’s Center for Health Care Policy, and told Texas Scorecard that while the waiver is a good, it’s only a band-aid and not a substitute for an effective block grant. Dr. Waldman says Texas needs to be given oversight for “eligibility standards, verification process, and benefits packages.”
“As long as Washington mandates them, Texas will not have control of its own budget because we cannot control spending,” Waldman said. “I am a doctor first, i.e., the health of Texans comes before all things, including both ideology and budget. Having said that, I know that the best system for care is via the free market.”
Waldman added, “If Texas can gain control of its own Medicaid program, and not have to pay 40% of the Medicaid budget to comply with federal rules and regs, we can divert billions (literally) to care providers and away from healthcare bureaucrats.”
But doing that requires congressional action; a Republican-controlled Congress should be amenable to such ideas. Should be.
Texas’ senior senator, Majority Whip John Cornyn, told Texas Scorecard he understands the need for reform:
Eight years of one-size-fits-all federal mandates have strained state budgets across the country, with no example more egregious than a broken Medicaid system that has failed Texans. Under President Trump, we should finally give states like Texas the flexibility to use tools like block grants to design health care solutions that work best for them and won’t bankrupt our next generation.
Actions will always speak louder than words, and Texas taxpayers are expecting the GOP to deliver on their promises with meaningful actions.