Texas state budget proposes deep Medicaid cuts
Texas lawmakers under Republican leadership unveiled a budget proposal this week to cover the years 2012-2013 that would cut Medicaid reimbursements to long-term care facilities by 33 percent and payments to hospitals by 10 percent.
The cuts come at a time when some state legislators have suggested scrapping the Medicaid program altogether, which at $8.3 billion per year is the state's second largest expenditure behind education.
Opponents of the cuts say Medicaid reimbursements for doctors and other health providers are already too low and have restricted access for patients. They say cutting the state's contribution to Medicaid doesn't make sense since the state will lose a significant amount of federal Medicaid matching funds.
Rick Black, spokesman for Dallas-based Tenet Healthcare, told the Dallas Morning News that Texas hospitals face a double-whammy: They serve the highest percentage of uninsured patients in the country, while also receiving the country's stingiest Medicaid reimbursements.
"Medicaid cuts are not a cost-effective way to save money," he said. "For each dollar of Medicaid cut in the state budget, Medicaid loses $1.50 in federal matching funds."
Proponents of the cuts say the time has come to rein in state Medicaid spending. According to a report from the Texas Public Policy Foundation, Medicaid spending, at its current growth rate, would take up 50 percent of all state funds by 2040.
"The Medicaid program is too large and comprehensive to tweak here and there to create meaningful reductions," the report concluded. "Though doing so will present tremendous challenges, the state must totally restructure the program to bend the growth curve down."
Industry groups contend that the proposed cuts would have a catastrophic effect on public health and local economies.
The Texas Health Care Association, which represents long-term care providers in the state, responded to the proposed budget by saying they would take their case directly to the local level to get state legislators to oppose the cuts.
"If this proposal proceeds, Medicaid nursing home care in Texas will cease to exist," said Tim Graves, president and CEO of the THCA. "This Draconian action is a clear disconnect between what is being proposed in Austin and the damage that will actually occur in local lawmakers' home districts."
