New Budget Figures Indicate Substantial Increase in Texas Medicaid Costs

Although the Texas Legislature's Budget Board last month told lawmakers they could anticipate a $300 million surplus in the Medicaid budget for 2002-2003, revised budget estimates indicate that the program instead could have a $300 million budget deficit, the Houston Chronicle reports. Using two-month-old figures, the budget board had recommended to the state Senate Finance Committee a $715 million increase in funding for Medicaid during 2002-2003. But new estimates of prescription drug costs, more beneficiaries and more doctor visits have combined to "drive up Medicaid costs" for the state to more than double the recommended amount, the Chronicle reports. Because state law mandates that the budget be balanced, the Chronicle reports that legislators will be "force[d] ... to further tighten their belts."

Medicaid Improvements Now 'Endangered'
As a result, proposed Medicaid "simplification" legislation could lose support. The $400 million, two-year plan would make it easier for children to enroll in Medicaid. Currently, the state requires face-to-face interviews every six months, as many as 14 forms and "rigorous documentation" to apply for Medicaid, while the simplification measure would have allowed families to reapply for Medicaid by mail or telephone rather than face-to-face interviews ( Kaiser Daily Health Policy Report, 9/18/2000). With the new budget estimates expected to be released on Feb. 7, the Chronicle predicts that some legislators could "argue that it makes no sense to simplify Medicaid enrollment while the state is struggling to pay for existing participants." Simplifying Medicaid enrollment, the Chronicle explains, would possibly increase the number of beneficiaries and thus increase the state's financial contribution to the program. Senate Finance Committee Chair Rodney Ellis (D) said that while the simplification plan is a "major priority," the new budget estimates will make getting the plan passed "more of a challenge." The Finance committee is expected to meet Feb. 7 to hold a hearing on the new estimates (Berger, Houston Chronicle, 2/7).