Testimony Senate Finance Committee SB 1 February 13, 2009 Anne Dunkelberg, Assoc. Director, dunkelberg@cppp.org 900 Lydia Street - Austin, Texas 78702 Phone (512) 320-0222 (X102) – www.cppp.org

Impact of Unemployment Growth on Medicaid and SCHIP and the Number Uninsured $3.4 1% increase in unemployment also = a 3-4% decline in state revenues $1.4 State 1.1 1.0 = 1% & Increase in National Unemployment Rate $2.0 Federal Increase in Medicaid and SCHIP Enrollment (million) Increase in Uninsured (million) A one percent rise in the nation's unemployment rate is projected to lead to 1.1 million additional uninsured and 1 million new Medicaid enrollees (600,000 children and 400,000 adults), increasing overall state Medicaid spending by $1.4 billion while tax revenues fall 3 to 4 percent. Increase in Medicaid and SCHIP Spending (billion) Source: Stan Dorn, Bowen Garrett, John Holahan, and Aimee Williams, Medicaid, SCHIP and Economic Downturn: Policy Challenges and Policy Responses, prepared for the Kaiser Commission on Medicaid and the Uninsured, April 2008

Economic Recovery Package: Texas projected to get extra $5.3-$5.7 billion for Medicaid thru end of 2010-2011 biennium. Formula will increase this aid quarterly if state unemployment worsens. Maintenance of Effort required (income limits & eligibility policy) Investing less than 10% of this in eligibility system improvements and 12-month coverage helps save our eligibility system, helps kids, AND BRINGS MORE ENHANCED $$ TO TEXAS Assistance for newly unemployed: Premium assistance to help unemployed buy COBRA or state continuation coverage SCHIP Reauthorization: Eligible for BONUSES if we enroll more MEDICAID kids (“reach poorest kids first”) and streamline processes

Eligibility Staff Shortage: A Vicious Cycle

Texas Medicaid: Who it Helps July 2007, HHSC data. Total enrolled 7/1/2007: 2.79 million

Uninsured Texas Children, 2007 Total: 1.53 million Children In Texas and nationwide, the majority of newly-uninsured children are in families above the CHIP upper limit of 200% of poverty. Over 300% of poverty Below poverty 200-300% of poverty 100-200% of poverty Source: U.S. Census

Year-long coverage in Children’s Medicaid —equality with CHIP policy—would be the single most effective way: To demonstrate Texans’ commitment to the bipartisan goal of insuring the poorest uninsured children first. To increase enrollment of Texas’ eligible uninsured children, To dramatically cut the costs and workload of our state eligibility workers, and boost their performance. 12-month coverage will: Promote continuity of care and stable medical homes for children, and ease recruitment and retention of Medicaid doctors & providers. Help Texas Medicaid meet Frew federal court lawsuit settlement goals for check-ups, immunizations, and access to care (7.6 months average) Reduce costs per child: Texas and California studies have found that 12-month coverage reduced hospitalizations and the annual cost per child. 12 month continuous eligibility for Children’s Medicaid would dramatically reduce HHSC’s workload from 3.8 million renewals per year to 1.9 million, helping Texas get back into compliance with the Federal law requiring 45 day application processing, and reducing the number of state workers needed to comply with federal law.

Growth of Health Insurance Costs Source: Georgetown University Center for Children and Families; Medical Expenditure Panel Survey Insurance Component Tables; U.S. Census Bureau; and U.S. Dept. of Health and Human Services. Cost of ESI premiums are increasing 10x faster than income. In the U.S., premiums for family coverage increased 30% from 2001 to 2005, while policyholders’ income increased just 3%. In Texas, premiums for family coverage increased 40% from 2001 to 2005, while income increased just 3.5%. Robert Wood Johnson Foundation, April 2008

Use of This Presentation The Center for Public Policy Priorities encourages you to reproduce and distribute these slides, which were developed for use in making public presentations. If you reproduce these slides, please give appropriate credit to CPPP. The data presented here may become outdated. For the most recent information or to sign up for our free E-Mail Updates, visit www.cppp.org. © CPPP Center for Public Policy Priorities 900 Lydia Street Austin, TX 78702 P 512/320-0222 F 512/320-0227