News
Texas Public Policy Foundation outlines alternative to failed Medicaid program
Tuesday, February 22, 2011
Texas Public Policy Foundation
AUSTIN – The Texas Public Policy Foundation unveiled a proposal that would replace the federal Medicaid program with a state-driven TexHealth program, dramatically transforming the way medical care and services are provided to low-income individuals.
“The federal Medicaid program is structurally designed to make states spend money in ineffective ways,” said TPPF Executive Director Arlene Wohlgemuth. “However, Texas now has the opportunity to reform our state’s Medicaid program so that it better meets the needs of both the individuals it serves and the taxpayers who support it.”
The TexHealth proposal was contained in the Foundation’s new report, “Medicaid Reform: Constructive Alternatives to a Failed Program,” which was released at a 9:45 a.m. press conference at the Texas State Capitol. Lt. Gov. David Dewhurst and Texas House Public Health Chair Lois Kolkhorst also spoke at the press conference.
“This report marks the first time that anyone has laid out a full alternative to Medicaid that is not a single-payer model,” Wohlgemuth said. “A system where government makes all the decisions and holds all the authority is not the Texas way of doing things.”
Medicaid is a federal-state partnership to provide health care to two distinct populations: low-income individuals who are predominantly women and children; and aged, blind, and disabled individuals who require long-term care. While the federal government provides a majority of the funding for Medicaid in Texas, federal program rules are co-opting a growing share of Texas’ general revenue funds and crowding out other state functions such as education and public safety.
“This session, we are seeing the tug of war between education and Medicaid for limited state funds,” Wohlgemuth said. “If we do not reform Medicaid this session, it will require between $10 billion and $14 billion in additional state revenues two years from now.”
The Foundation’s TexHealth proposal would reform Medicaid along free market principles, converting the program in Texas from a defined benefit to a defined contribution for the purchase of health insurance. TexHealth would subsidize the costs of the insurance premium in the private market, providing support for individuals on a sliding scale tied to the individual’s income and assets. The state’s role would shift from that of a benefit provider to one of determining eligibility through a simplified application and then allowing individuals to select an insurance provider.
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