Restricting Medicaid and CHIP Eligibility

TMA Testimony

House Public Health Committee
House Bill 3634

Tuesday, April 18, 2017

Submitted on behalf of:

Texas Medical Association

Texas Pediatric Society

Texas Academy of Family Physicians

Texas Association of Obstetricians and Gynecologists

American Congress of Obstetricians and Gynecologists-Texas Chapter 

On behalf of the Texas Medical Association, Texas Pediatric Society, Texas Academy of Family Physicians, American Congress of Obstetricians and Gynecologists-Texas Chapter, and the other specialty societies listed on our written testimony, thank you for the opportunity to testify today regarding House Bill 3634. Our organizations wish to speak “on” the bill, despite substantial alarm about its potential impact. If enacted, it would resurrect enrollment barriers within Medicaid and the Children’s Health Insurance Program against which we have long fought. These barriers would increase the number of uninsured Texans. Further, the bill recommends that the Texas Health and Human Services Commission (HHSC) pursue fundamental changes in federal Medicaid financing that we believe would be detrimental to the Texas health care safety net and our patients. 

HB 3634 directs HHSC to renegotiate Texas’ Medicaid 1115 Transformation Waiver to allow Texas to more-frequently review Medicaid and CHIP enrollees’ eligibility as well as to reinstate asset tests and disallowance of income disregards (the ability of the state to deduct from a family’s income costs such as child care), Other speakers will discuss the technical changes in greater specificity, but the net effect will be more uninsured low-income Texans, disruptions in patient care, and hassles for patients, physicians, and the state. Already Texas is the uninsured capitol of the nation, with roughly 17 percent of working age Texans lacking coverage. Some 9.5 percent of children lack coverage despite being eligible for children’s Medicaid or CHIP. Though these numbers are still too high, they are an historic low for Texas. We do not want to lose the gains we’ve made.

For more than a decade, our organizations have fought to simplify and streamline the Medicaid and CHIP eligibility processes. We have strongly supported 12-months continuous coverage for children in Medicaid and CHIP, which is an essential component of promoting medical homes, and eliminating asset tests – which deter poor families from saving for their futures. In fact, TMA, TPS, ACOG, and TAFP worked hand-in-glove with consumer and faith-based organizations to pass House Bill 109 in 2007 to streamline the eligibility and enrollment process for children enrolled in CHIP. Reversing course would be detrimental to our patients and bad public policy. Texas’ own experience shows why.

Children enrolled in CHIP already enjoy 12 months continuous coverage.* But fourteen years ago, the legislature rolled back CHIP continuous coverage to only 6 months, with disastrous results: more than 200,000 children lost coverage. For the majority of these children, disenrollment happened not because they were actually income-ineligible, but because their busy working parents struggled to comply with bewildering and unnecessary red tape. In fact, most of the children actually regained CHIP coverage or enrolled in Medicaid (which has a lower matching rate), demonstrating the futility of the additional paperwork. Despite regaining coverage, the loss of insurance – even temporarily – resulted in disruptions in children’s care and ultimately, increased costs to the state. Children missed well-child visits as well as necessary medications (such as for asthma-medicine), which only resulted in more emergency department visits, hospitalizations and missed school. Thankfully, the Legislature reversed course in 2007.  

For the poorest Texas children – children on Medicaid – Texas only provides six months of continuous coverage. After that period, federal law requires states to provide an additional six months of coverage, but the state can conduct monthly electronic income checks. Texas families undergo five income checks during this latter 6 months. Already, this process is error-prone and burdensome to both families and the state. This session, our societies testified strongly in favor of HB1408 by Rep. Philip Cortez to extend 12 months continuous eligibility to children’s Medicaid, to mirror CHIP eligibility. Enacting twelve months’ continuous coverage is a recognized best-practice for insuring more children. Twenty-four other states already do this, including Alabama and Kansas. 

It appears HB3634 also would alter existing eligibility verification policies for all other Medicaid populations – newborns, pregnant women, patients with disabilities and seniors. Newborns receive 12 months coverage, and pregnant women are enrolled throughout their pregnancies, ending after the 60-day postpartum period. Limiting babies and pregnant women to 6-months’ coverage would be a tremendous setback since we know a large number of families will miss deadlines and lose coverage during periods of their lives when preventive care is paramount. During a child’s first year of life, babies receive seven well-baby visits after leaving the hospital. During these visits, the child’s physician not only provides immunizations and growth assessment, but developmental screenings to determine whether the baby has any developmental delays. A missed appointment during this time could result in a lost opportunity for early intervention for a developmental disorder. Failure to intervene early might affect a child’s long-term health outcomes. For pregnant women, interrupting care during their pregnancy would disrupt prenatal care. Given Texas’ high rates of maternal death and illness, requiring more-frequent eligibility checks could undermine Texas’ efforts to ensure early-entry and ongoing prenatal care. 

Reinstating asset tests and income disregards is counterproductive to Texas’s goal of fostering personal responsibility among low-income families. No one supports covering people who are ineligible for Medicaid or CHIP, but a substantial body of literature shows that asset tests (which federal law now prohibits) only deter low-income families from saving for emergencies and their children’s education. Meanwhile, prohibiting income disregards (also barred) would penalize families who have high childcare costs or work-related expenses. 

As a rule, we do support sliding scale cost-sharing within CHIP and Medicaid, excluding preventive and maternity services. However, we believe there must be prudent limits, including applying cost-sharing only to families with incomes above 75 percent federal poverty level, capping annual out-of-pocket costs, and ensuring the policy does not inadvertently deter patients from obtaining medically necessary primary and specialty care or medications. Missed appointment fees are controversial. While there definitely needs to be a concerted effort to reduce Medicaid or CHIP no-show rates, many low-income families also lack access to convenient medical transportation to get to appointments. Others cannot find needed child care. This issue needs much more discussion as to its impact and how best to address it among low-income families. 

Lastly, I also want to speak to the provision directing HHSC to pursue a Medicaid block grant, an approach we believe will severely undermine the program as well as the state’s health care safety net. Medicaid costs are rising and limited state tax dollars must be diligently managed. But Medicaid costs are driven primarily by caseload growth, not per-person costs. Texas is the fastest-growing state in the country. Enactment of a block grant would penalize Texas for being an attractive place to live. As our population grows, Medicaid federal funding would stay the same, except for a nominal inflation factor. No additional funding would be provided in a public health emergency (such as widespread Zika or flu infections), new (costly) medical breakthroughs, natural disasters, or increased use or intensity of services, such as increase in substance-abuse treatment for patients with an opioid addiction.

Many lawmakers argue in favor of capping federal Medicaid funding in exchange for greater program flexibility. But lawmakers already have tremendous latitude in designing Medicaid, ranging from the amounts the state pays providers to designing the Medicaid delivery system. For other issues, such as experimenting with Medicaid cost-sharing or testing innovative models of care, states can seek federal waivers. Flexibility and capped funding are not inherently linked; states can pursue greater federal flexibility without upending Medicaid financing. Indeed, by reducing federal funds, low-spending states like Texas might find diminished ability to implement additional services, such as enhancing opioid addiction treatment or covering more people.

Furthermore, capped Medicaid funding will undoubtedly have enormous implications for patients, physicians and providers. Texas is grappling with formidable health issues. Beyond continuing to be the nation’s uninsured capital, 21 percent of Texas children live in poverty -- a known risk factor for short- and long-term behavioral and physical health disorders; 34 percent of adults are considered obese -- contributing to high rates of chronic health conditions, including diabetes and heart disease; and opioid addictions continue to escalate. Alarmingly, Texas also has one of the highest rates of maternal mortality and morbidity, doubling from 18 per 100,000 births to 36 per 100,000 births from 2010 to 2012. While the factors contributing to maternal death and illness are complex and varied, one reason is lack of access to care in the 12 months following delivery. Without coverage, women with chronic conditions –such as hypertension, diabetes, or perinatal depression – often go without care, leading to poor outcomes.

Undoubtedly, Medicaid has its limitations, beginning with too many paperwork headaches for all Medicaid stakeholders. But Medicaid is the keystone to Texas’ safety net system. Funding cuts to the program will not only harm its patients and physicians who treat them, but the entire health care system. Nearly every hospital in Texas receives supplemental Medicaid funding to offset uncompensated care. Trimming funding would jeopardize their ability to provide services, including maternity and trauma services, for all Texans. In some communities, the loss of funding would shutter hospital doors. 

Instead of a block grant, we commit to collaborating with Texas’ legislative leadership to seek relief from federal administrative requirements that impose undue costs and paperwork on patients, physicians, and the state without improving patient care or outcomes.

*For children enrolled in CHIP with incomes above 185 percent of federal poverty, a periodic electronic income check is conducted to ensure the family still qualifies.

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Last Updated On

April 18, 2017