1 Update: Children’s Health Care and More Children’s Health Coalition of the Rio Grande Valley Department of State Health Services 601 W. Sesame Drive Harlingen, Texas October 4, 2005 Anne Dunkelberg, Assistant Director 900 Lydia Street - Austin, Texas Phone (512) – fax (512)

2 Context for Funding Texas’ Health Care “System” US Census Bureau Statistics: Approximately 5.6 million Texans uninsured in 2004 –25.1% of Texans of all ages were uninsured –27.6% of Texans under age of 65 were uninsured Another three million Texans covered by Medicaid or CHIP Why are so many Texans uninsured ? Low percentage of employer-sponsored insurance (ESI) –7.6% below national average for < 65 (55.6%) –9.3% below national average for <18 –Approximately 83% Texas Medicaid recipients are below poverty –Fewer than 14% of Americans below poverty have ESI

3 Medicaid in Texas: Who it Helps Medicaid: As of August 2005, 2.7 million Texans were enrolled in Medicaid: 1.8 million were children –about 83,000 of these children, or 4.6%, were receiving disability-related Medicaid (97% of these on SSI) –about 13,500 were pregnant teens –144,750 in TANF families (5.4% of total caseload) –OTHER 1.58 MILLION Are in WORKING POOR FAMILIES 873,000 were adults: –678,000 (78% of the adults) were elderly or disabled. Adults on SSI account for 60% of the aged and disabled recipients –Other adults: 96,200 maternity coverage; 38,600 TANF parents (1.4% of total caseload); 61,100 either TMA (Transitional Medicaid Assistance) or parents who are at or below TANF income, but not receiving TANF cash assistance Children’s Health Insurance Program (CHIP): as of September 1, 2003 — 507,259 children as of July 1, 2005 — 326,809 (drop of 179,992, or 35%)

4 Texas Medicaid: Who it Helps August 2005, HHSC data. Total enrolled 8/1/2005: 2,693,286

5 Medicaid Cuts: What was Reversed by 2005 Legislature Adults ’ Medicaid Services Restored (eff. 10/05): –Podiatrists –Eyeglasses and Hearing Aids Mental health services by social workers, psychologists, licensed professional counselors, and licensed marriage and family therapists. There was complication with the funding for this benefit, but at this time it appears services by all 4 mental health provider types will be restored December 1, Center for Public Policy Prioritieswww.cppp.org

6 Medicaid Cuts: What was Reversed by 2005 Legislature PROBABLY Restored: The Personal Needs Allowance of Medicaid nursing home residents (the monthly amount that Medicaid nursing home residents may keep from SSI, Social Security or other pension income; the rest goes to the nursing home) –was cut in 2003 from $60 to $45. –Though not restored by the budget or other bill, Gov. Perry and Senator Zaffirini have pledged to ask LBB for “budget execution” to allocate the $13 million in state dollars needed to restore this. LBB meeting delayed due to hurricanes Katrina and Rita. STAY TUNED! Center for Public Policy Prioritieswww.cppp.org

7 Medicaid Cuts: What was Reversed by 2005 Legislature Not exactly restored: Medically Needy Spend-Down Program for Parents (Temporary Coverage for Poor Families with Catastrophic Medical Bills) –HHSC estimated that full restoration of MN would cost $175 million GR for ; SB1 authorizes just $35 million for “partial restoration” but assumes this will be funded entirely by voluntary contributions of local tax dollars (“IGT”) from the big urban hospital districts –Also says $20 million GR could be added to this IF the local funds are provided first (the $20 million would come from savings achieved due to the Women’s Health and Family Planning Waiver, more later on this) No action so far to restore. STAY TUNED! Center for Public Policy Prioritieswww.cppp.org

8 Medicaid and CHIP provider rate cuts: –Most Medicaid and CHIP providers had rates cut in 2003: hospitals and doctors had a rate cut of 2.5%; nursing homes 1.75%, and community care providers 1.1%. –In August 2004, HHSC proposed and LBB approved keeping most the cuts at the same level for 2005 (i.e., not making deeper cuts); but hospitals took a deeper 5% cut. –2005 legislature restores rates to 2003 levels for Community Care services and Waivers, and for ICF-MR (all at DADS), but not for doctors, other professionals, hospitals, or CHIP. –All other rate cuts remain. Rate cuts were the largest HHS cut made in 2003; much larger than the CHIP cuts. Medicaid Cuts that Remain Center for Public Policy Prioritieswww.cppp.org

9 Income Caps for Texas Medicaid and CHIP, 2005 $21,400/yr $29,767/yr 185% 133% $16, % $2,256$3,696 14%23% 73% $6, % $20,844 $32, % Income Limit as Percentage of Federal Poverty Income Annual Income for a family of 3, Except Individual Incomes for SSI and Long Term Care

10 Community Care and Waiting Lists: funding for enrollment increases 2003 Legislature reduced numbers and/or levels of services in capped Community Care and Health programs budget provides funds to increase a number of non- entitlement programs’ enrollment For children: –MDCP increased from 977 in ’03, 983 in ’05, to 1,993 in –CSHCN increased from 1,463 in ’03, 2,114 in ’05, to 2,293 in ’07 Most Medicaid waivers, HIV Meds increased Exceptions: –CBA: was 30,279 in ’03; 26,100 in ’05; to 28,401 in ’07, –Kidney Health Program 22,834 in ’03; 21,247 in ’05; to 20,415 in ’07 –In-Home and Family Support for aged & disabled, MR still below ’03 levels (MH IHFS program eliminated in ’03 and not restored)

11 Medicaid Caseloads: Actual and Projected Actual Medicaid enrollment, May 2005 (Final “ recipient months ” average 104% of point-in- time enrollment, after retroactive coverage is included) 2,686,699 (equals about 2,794,167 recipient months) HHSC 2/05 estimated, (6-month coverage for children) 3,124,1103,356,597 Introduced version, SB 1 (6-month coverage of children) REDUCES BUDGET $930 MILLION GR 2,987,5783,137,045 Medicaid Buy-In (New Clients)2,273 Waiting List (New Clients)1,0783,196 Perinatal Subtractions (i.e., moved to CHIP)(14,386)(39,214) Medically Needy10,11810,918 Final Budget,SB1 (6-month coverage of children) 2,986,6613,114,218 Difference, HHSC projected and budgeted in SB 1-137, ,379 Center for Public Policy Prioritieswww.cppp.org

12 CHIP Cuts, Budget Summary of 2003 CHIP changes:* Benefits eliminated: dental; vision (eyeglasses and exams); hospice; skilled nursing facilities; tobacco cessation; chiropractic services. Mental health coverage was reduced to about half of the coverage provided in 2003 Premiums and co-payments increased Coverage period reduced from 12 months to six New coverage delayed for 90 days Income deductions eliminated (gross income determines eligibility) Asset test (limit) added for those above 150% of the poverty Line (took effect August 2004) Outreach and marketing reduced *Underlined Items Restored by 2005 Legislature

13 How CHIP Fared in 2005 Session Restored: Dental, vision, hospice and mental health benefits restored to 2003 levels Funding to replace monthly premiums with more affordable and convenient enrollment fees. HHSC presentations have outlined an annual fee of: –No enrollment fee below 133% of the federal poverty level (FPL) (<$2,145/ family of 4) –$25 per family (per 6-month period) from % FPL ($2,145-$2,419/family of 4); –$35 per family (per 6-month period) from 151%-185% FPL ($2,420-$2,983/family of 4); and –$50 per family (per 6-month period) from 186%-200% FPL ($2,984-$3,225/family of 4)

14 How CHIP Fared in 2005 Session None of the CHIP restoration bills ever had a public hearing, not even Senator Averitt’s SB 59. Restorations made were all done via the budget. These 2003 Changes Remain: –Coverage period reduced from 12 months to six. Language in law now makes this permanent, rather than planning for a return to 12 month coverage at a future date. –New coverage delayed for 90 days. (New perinatal coverage could eliminate this for many newborns.) –Income deductions eliminated (gross income determines eligibility). –Asset test (limit) added for those above 150% of the poverty line (took effect August 2004). –Outreach and marketing were reduced in 04-05, important to monitor and push for strong investment in both in

15 Texas Child Medicaid and CHIP Combined Enrollment (January 2002-August 2005) Source: All figures from Texas Health and Human Services Commission Center for Public Policy Prioritieswww.cppp.org

16 CHIP Caseloads: Now and Projected September 2003 actual caseload 507,259 August 2005 actual caseload326,770 decline, 9/03 to 5/05 (36%)(-180,489) HHSC 2/05 projected enrollment, if 12-month eligibility restored 386,110467,404 HHSC 2/05 projected enrollment (6 month renewal) 360,786388,920 SB 1 funded caseload, traditional CHIP (6 month renewal) 344,750351,132 Additional caseload, perinatal coverage 17,42547,498 Total,SB 1 projected CHIP caseload, traditional & perinatal CHIP 362,175398,630 Rider 57 HHSC (SB 1) requires agency to request addl. $ for CHIP from LBB if needed for enrollment and benefits.

17 New CHIP Perinatal Coverage Planned Last-minute addition to the budget bill authorizes this (Rider 70 HHSC). No previous bill or public discussion, but agency has done significant lead work behind the scenes HHSC assumes start-up 1/2006. The benefit and eligibility belong to the “perinate”, not the mother. Will provide prenatal care and delivery to women % FPL (who make too much for Medicaid) ALSO will pick up mothers 0-200% FPL who do not qualify for Medicaid maternity coverage because they are either a legal immigrant or an undocumented resident. This means that many of the covered perinates would have been eligible for Medicaid at birth, i.e. all those with incomes below 185% FPL Center for Public Policy Prioritieswww.cppp.org

18 New CHIP Perinatal Coverage Planned At some point before or at the first birthday, Medicaid-eligible children will be switched back to that program. Of the nearly 48,000 perinates per month projected in FY 2007, over 39,000 are infants who would have been enrolled in Medicaid under current rules, and about 8,300 are perinates who would not have been covered without this option. 7 states have these programs (AR, IL, MA, MN, MI, RI, WA); all but AR provided prenatal care to immigrants with state dollars before the CHIP program. Controversy because (1) created under federal rule (not law) and (2) gives “person” status to the unborn. Center for Public Policy Prioritieswww.cppp.org

19 Women’s Health and Family Planning Medicaid Waiver SB 747 by Senator John Carona,. Texas Medicaid will provide basic medical check-ups and birth control services to adult Texas women (ages 18 and older) up to 185% of the poverty line (that’s $2,481 per month pre-tax income for a family of 3 in 2005). Currently in Texas, working mothers must live at or below 23% of the FPL to qualify for Medicaid (23% of poverty is less than $308 per month for a family of 3) and childless women can’t qualify at all – so the waiver could help many thousands of women who can’t get full Medicaid benefits. Texas has the highest % of uninsured women aged 18 to 64 (28.3%) in the nation (the U.S. average is 17.7%) About 40% of all Texas women live below 200% of poverty, and 50% of them are uninsured. HHSC submitted an outline to federal gov’t. in August; no target date has been announced for start-up.

20 Women’s Health and Family Planning Medicaid Waiver Services covered will include: well-woman exams, counseling and education on contraceptive methods, provision of contraception, screenings for diabetes, breast and cervical cancer, sexually transmitted diseases, hypertension, cholesterol and tuberculosis, risk assessment and referral of medical problems to appropriate providers. It is against federal and state law to use Medicaid funds for abortion, and SB 747 specifically excludes abortion providers. The bill also excludes coverage of emergency contraceptives. Outreach will be critical once the program starts, so STAY TUNED!!

21 Medicaid Buy-in Program for Working Disabled: “MBI” SB 566 by Deuell Directs HHSC to develop/start program to allow working individuals who earn too much to qualify for Medicaid, but less than 250% FPL ($23,925/year for a single person) to pay premiums to get Medicaid coverage. Premiums amounts will depend on income level, and have 2 parts: –one is based on “unearned” income (like disability benefits) and –the other part on earned income (like wages from a job) Latest HHSC information suggests September 2006 as earliest start-up.

22 Universal Services Card & Medicaid Biometric Finger Imaging Universal Services card authorized: (SB 46, by Nelson) –HHSC can develop a single “smart card” for use both as an ID for benefits like Medicaid, Food Stamps, and TANF, as well as an “EBT” card (like the Lone Star card) –CAN include finger imaging –MUST protect client privacy Statewide Expansion of Medicaid Finger Imaging authorized: (SB 563 by Janek) –HHSC can proceed to mandatory statewide use of finger image cards –Would be done in stages, and HHSC must adopt a plan for how to deal with lost and forgotten cards, who to exempt, and how to deal with “no match” situations BEFORE expanding No HHSC timeline announced yet for either of these projects

23 Medicaid Managed Care Statewide Expansion (PCCM, STAR+Plus, “ICM”) Primary Care Case Management: PCCM expanded to 197 additional Texas counties on September 1, 2005 Some Medicaid clients who do not live in a PCCM expansion county were enrolled in PCCM by mistake. Date for clients to pick a PCP extended to November 11. a referral from the client's PCP will not be required until December. PCCM Client Helpline When all PCCM Client helpline phone lines are tied up, the recording tells PCCM clients to call back from 7 a.m. to 9 a.m. or 4 p.m. to 7 p.m.; then they are disconnected. HHSC may have fixed this by now. Can also change PCP by mail (by mailing the PCP Selection form enclosed in packet, or go to to get a new form)

24 Medicaid Managed Care Statewide Expansion (PCCM, STAR+Plus, “ICM”) STAR+PLUS These provisions do not affect RGV – for now. The STAR+PLUS managed long term care HMO model serves aged and disabled Medicaid clients in the Houston area. New state laws and the state budget assumed savings from greater management of care for aged, blind and disabled Medicaid clients, via three models of care: –a modified STAR+PLUS HMO model, a new Integrated Care Management approach, or primary care case management –reduces Medicaid funding by $109.5 million GR A new enhanced PCCM-type “Integrated Care Management” (ICM) model will be implemented in the Dallas service area Where the HMO-style STAR+PLUS model is used, the state will modify that model to protect federal UPL payments to local public hospitals. Savings guaranteed by allowing HHSC to cut provider rates if the new model does not produce the required savings.

25 Integrated Eligibility and Enrollment June 30, HHSC announced 5-year, $899 million contract with Accenture, to take over operation of the state's eligibility and enrollment systems for Medicaid, CHIP, Food Stamps, and TANF cash assistance. Local offices will drop from 381DHS offices to 167 full-service offices and 44 “ satellite ” offices open on certain days only; the state will close 99 eligibility offices. Four call centers will provide assistance from 8 a.m. to 8 p.m., will receive and process applications, and consumers will be able to track their applications through an automated phone system. The number for assistance will be Center for Public Policy Prioritieswww.cppp.org

26 Integrated Eligibility and Enrollment Eventually will be able to apply through the Internet, over the phone and by fax or mail. Over 10,000 DHS state eligibility workers in 1997 reduced to 2,900 in IEE (counting the 600 out-stationed workers) Call centers will employ about 2,500 (total system = about 5,400) The transition to the new office structure will begin in January and will be phased in over a 10-month period. RGV will be last (September 2006, if on schedule) First step is takeover of CHIP enrollment in November (from current contractor, ACS)

27 Katrina and Health Care: Texas So far Texas’ waiver will allow simplified Medicaid or CHIP eligibility for Katrina evacuees. will cover, for a one-time period of 5 months, evacuees who meet Texas’ current Medicaid or CHIP categories and income limits. A major exception is that the disaster coverage will be available to parents (with dependent children) who have incomes as high as the federal poverty line (FPL; $1,341 per month for a family of 3 in 2005), compared to regular Texas Medicaid, which only covers parents up to 23% FPL (about $308 per month for a family of 3, or even less if the parent is not working). Childless adults are not included in this Medicaid coverage, but costs for such adults can be paid for under an uncompensated care pool.

28 Katrina and Health Care: Texas So far Evacuees can get their 5 months of Medicaid coverage any time between September 1, 2005 and June 30, 2006, as long as they apply by January 31, There will be no asset limits, and no premiums or co- payments required. Benefits will include what Texas Medicaid and CHIP now cover; mental health services not yet restored for adults in Texas Medicaid will be provided, but paid for through an uncompensated care pool and not treated as a Medicaid expense. HHSC says the pool will pay for care to all evacuees (if not covered by Medicaid) up to 200% FPL, for services delivered between 8/24/05 and 1/31/06.

29 Katrina and Health Care: National Scene Bi-partisan Katrina health care relief bill by U.S. Senate leaders does more for Texas and the Nation: goes significantly beyond Texas’ waiver in the number of evacuees eligible for Medicaid coverage; provides relief to evacuees in every state where they may have re-located (i.e., without a waiver); every state that receives evacuees will get the same 100% federal funding of the emergency coverage; provides major Medicaid matching fund relief to Louisiana, Mississippi, and Alabama; protects Texas and other states from a scheduled drop in federal Medicaid matching funds in 2006, worth an estimated $40 million to Texas (Texas’ match rate drops when our average per capita income improves relative to the national average and other states’ averages);

30 Katrina and Health Care: National Scene provides far more certainty about the manner and amount of federal funding of the health care than does the Texas waiver; and provides relief for Medicare beneficiaries, TANF recipients and programs, and Emergency Unemployment Compensation, none of which are addressed by the Texas Waiver. Supported by Texas’ Senators, national Governor’s Association, AMA, Senate Majority and Minority Leaders Frist and Reid. Opposed by Bush administration. As of last Friday, FEMA had reportedly received applications for assistance from 1.3 million displaced Gulf Coast residents. These applications came from 18,700 zip codes, nearly half of the nation's residential postal zones. To read the article, go to:

31 Despite Katrina, Medicaid Cuts Still a Threat in Washington 2006 federal budget “blueprint” passed in April 05 Congress directed to make significant cuts (over 5 yrs) $24 billion in cuts to domestic “discretionary” programs (non-defense: Head Start, education, housing, etc) $35 billion in cuts to “mandatory” programs (entitlements, incl. Medicaid and Food Stamps) Medicaid targeted for $10 billion in cuts –Original schedule: Proposals on cuts to be made by September 16 by Senate Finance/House Energy Commerce. Postponed until October 17 due to Katrina Despite Katrina, some in Congress still pushing to cut Medicaid, some want to cut by MORE than $10 billion.

32 Despite Katrina, Medicaid Cuts Still a Threat in Washington Federal budget resolution authorizes additional $106 billion in tax cuts over 5 years Cuts will increase federal deficit by $168 billion over next 5 years Original schedule: 1st vote on tax cuts week of Sept. 5 Extension of $70 billion cut to capital gains/dividend income 53% of benefits go to 0.2% households with incomes of $1 million and more per year Cuts to Medicaid would partially pay for these tax cuts; do not contribute to federal deficit reduction

33 Federal tax cuts passed in 2001 and 2003 cost more each year than the total amount likely to be spent on Katrina The cost of the tax cuts enacted in 2001 and 2003 is $225 billion this year alone and will climb to higher levels each year in the future, as more of the tax cuts enacted in 2001 take full effect. If Congress votes soon to extend and expand tax cuts, the cost of the tax cuts will increase to an average $250 billion a year over the next five years. The cost of the tax cuts in a single year exceeds the total anticipated costs of all expenses related to the hurricane over the years to come.

34 Ways to Be Informed and Involved Go to and subscribe to CPPP’s publication, the Policy Page. Go to to get on Texas CHIP Coalition listserve (be sure to read the minutes!) for National information about Congress, the President, Medicaid and CHIP: for more technical and detailed information about Congress, the President, Medicaid & CHIP, and the federal budget & taxes: