Texas Governor Proposes Solution to State’s CHIP Program Budget Deficit

Texas Gov. Rick Perry (R) has proposed using $19 million in expected savings from a bulk prescription drug buying program to "prop up" the state's CHIP program, which faces a projected $20 million shortfall over the next two years, the Fort Worth Star-Telegram reports. Beginning next month, the state's CHIP program, TexCare, and the state's Medicaid program will "team up" to buy prescription medicines in bulk, which will save the state an estimated $19 million. Putting those savings into TexCare "will reward innovation ... and allow the CHIP program to maintain quality health coverage for its current population and projected growth," Perry wrote in a Feb. 21 letter to members of the Legislative Budget Board, which has the power to make "spending adjustments" while the state Legislature is out of session. State Sen. Mike Moncrief (D) said, "It's a sound suggestion that makes good common sense. Any savings or rebates should be directed back into the program." However, state Sen. Rodney Ellis (D) "urged a go-slow approach." Ellis said, "Let's not rush into this. We don't know for sure that there will be a shortfall, or how big that shortfall might be. Let's not lock ourselves into something that might not be needed, or something that might not be sufficient to address the problem."

Increasing TexCare Copayments
In other TexCare developments, program officials plan a rise in copayments for drugs and doctor visits beginning next month. The copayments, based on a family's income, will range from no payment for generic drugs to $20 for brand-name drugs; $5 to $50 for emergency room visits; and $2 to $10 for doctor visits. The Star-Telegram reports that some consumer advocates have criticized the increases. But Moncrief countered, "We said from the very beginning that parents would be required to share in the cost, to the extent they can afford to" (Moritz, Fort Worth Star-Telegram, 2/26). Texas' plans to buy drugs in bulk and increase copayments come as an increasing number of states are cutting back on their CHIP programs, which face growing budget deficits and higher-than-expected enrollment (Kaiser Daily Health Policy Report, 2/25).