The three overview articles below are intended to help you understand the three categories of health care bills this session.
Children's Health
The Legislature should increase access to affordable health insurance for Texas children.
Texas has the nation’s highest rate of children without health coverage: around 1.5 million Texas children lack insurance, and almost 90 percent of these children have at least one working parent. The average cost of employer-sponsored family health insurance in Texas is $1,000 dollars per month—a sum clearly out of reach for a growing number of families.
We all shoulder the cost of uninsured patients through higher local taxes and skyrocketing private insurance premiums. Insuring children brings those costs down and millions of our federal tax dollars back home to Texas. In 2009, the Texas Legislature can make changes to provide access to affordable health insurance for all Texas children.
Clear the bureaucratic hurdles that keep eligible children from receiving health coverage.
About 750,000 Texas children, half of our uninsured youth, are eligible for—but not enrolled in—the Children’s Health Insurance Program (CHIP) or Children’s Medicaid. Our strained enrollment system cannot support the task of connecting these children with the insurance they need and that the state has promised them.
• Hire and train more staff and improve slow computer systems so errors and long delays don’t block coverage for children. Although federal law requires Medicaid applications to be processed within 45 days, Texas families frequently face waits of three months or longer due to backlogs in the state system.
• Reenroll children in Children’s Medicaid once, not twice, a year, thereby cutting the number of renewals eligibility workers have to process from 3.8 million to 1.9 million per year.
• Focus outreach in local communities by partnering with hospitals, school districts, and others to identify uninsured children. In addition, we should coordinate stakeholders throughout the state to foster exchange and promote best practices for connecting children with health insurance.
Address the challenges of families without health insurance options.
An estimated 500,000 uninsured children in Texas live in families who earn too much to qualify for CHIP, but many still don’t earn enough to afford private coverage. For some of these families, the expense of private health insurance for their children amounts to 15-30 percent of their salary. With private health insurance costs rising, these children in middle-class families have come to represent the fastest-growing segment of the uninsured child population.
• Allow families just above the eligibility limit access to CHIP coverage for their children to create an incentive for economic advancement and insure more Texas children.
The Private Health Insurance Market
The Legislature should implement common-sense regulations to give Texas a consumer-oriented health insurance market.
In Texas, more than 25 percent of the population, or 5.7 million people, do not have health insurance – the highest rate in the nation! The primary drivers of the uninsured in Texas are individuals and small businesses who identify the high cost of health insurance as the primary barrier to accessing coverage.
The Role of the Texas Department of Insurance
• TDI primarily monitors the financial health of insurance companies operating in Texas to ensure that carriers are able to fulfill obligations and pay future claims. TDI has no strategic mission to focus on the availability and affordability of health coverage in Texas. The Legislature has charged TDI with a number of initiatives to study ways to increase the availability and affordability of health insurance in Texas. Many of these initiatives aim to encourage insurance companies to write insurance for those who do not have health insurance. Unfortunately, TDI does not have the mandate, authority or tools needed to implement regulations to improve health insurance coverage in the state.
• Texas does not regulate health insurance as heavily as it does other insurance lines. Self-insured companies, a large percentage of the market, are exempt from state regulation through the federal Employee Retirement Income Security Act. In addition, more than 80 percent of Texans that should be protected by state oversight receive their care through Preferred Provider Organization (PPO) plans that are not regulated by TDI. With the migration of the healthcare market toward PPO plans, a significant portion of the healthcare system – PPOs – goes unregulated.
An Opportunity for Change
With the Texas Department of Insurance under sunset review, the enhanced debate over health care insurance regulation will give the Legislature the opportunity to remove barriers that contribute to making health insurance coverage unaffordable or inaccessible. This in turn can help use the private market to reduce the number of uninsured Texans.
• Provide consumers with greater transparency about health plans by requiring health insurers to report and TDI to publish more robust information about insurers’ business practices, such as administrative costs, calculation of premium quotes and amount of premium dollars paid in medical claims.
• Establish licensure requirements for preferred provider organizations and require the TDI to oversee and regulate these health plans’ activities.
• Supplement current insurance companies’ funding of the state’s High Risk Pool to make premiums more affordable for individuals who cannot obtain coverage elsewhere, often due to “pre-existing” conditions.
• Improve the ability of small businesses and the self-employed to pool and share risk and use greater bargaining power to get a fair price for insurance.
• Create a reinsurance system to help small businesses and their employees access lower-cost health insurance. The state-funded reinsurance program would over a portion of claims above a certain threshold, reducing premiums for all participants.
• Establish a business tax credit for companies that provide health insurance for their employees. Employers should be allowed to deduct the amount of the health insurance premiums paid to reduce their gross taxable receipts and their corresponding tax liability.
Recovery Act Funding and Health Care
The Legislature Should Use Health-Related Recovery Funds To Improve Access to Quality, Affordable Health Care in Texas
The American Recovery and Reinvestment Act (federal recovery package) will make around $16 billion available to the state budget through 2011—much of it directed to improve health care coverage and access. Texas’ elected leaders should take the steps needed to ensure maximum use of these funds to help Texans access health care.
Purpose of Federal Aid
• Federal aid to states is intended to stimulate the economy and speed its recovery. State Legislatures that fail to spend all available money will see less of a positive economic impact for their constituents from the recovery package.
• Federal dollars temporarily replace state revenue dollars lost to the economic downturn, and these federal dollars can be replaced once again with state revenue when the economy recovers.
Health Care Funding in the Recovery Act Medicaid
Texas is expected to get $5.45 billion in federal funds to help pay for Medicaid through 2011. These funds are intended to make sure that in a time of economic hardship when the need is greatest, states avoid cuts to Medicaid and have extra funds to meet the increased number of uninsured who qualify for the program.
The Legislature should use federal recovery funding to support Texas Medicaid by:
• Preventing any cuts to Medicaid by covering the need for current services;
• Fixing Texas Medicaid’s enrollment system, which is in crisis and cannot handle current demand, much less growing needs resulting from rising unemployment. Additional eligibility staff and 12-month children’s Medicaid enrollment are the keys to improvement; and
• Making updates to Medicaid and CHIP provider reimbursements, so enrollees can find a doctor when they need one.
COBRA Coverage
The recovery package includes federal funding to cover 65% of the cost of COBRA and COBRA-like premiums for up to 9 months for workers laid off during the recession and their families. This funding will help newly-unemployed Texans maintain access to private health insurance coverage while they look for new jobs. The 65% subsidy is fully federally funded and requires no state general revenue.
To make sure that recently unemployed Texans can get the maximum federal assistance to stay insured, the Texas Legislature must modify state insurance law by:
• Lengthening the coverage period for state COBRA-like “continuation” coverage; and
• Giving recently unemployed Texans a new chance to enroll in COBRA-like coverage and take advantage of the 65% subsidy.
Other Health Care Funding
The recovery package funds other health care priorities, including:
• Investments in the development and adoption of electronic medical records and e-prescribing;
• Investments in Community Health Centers, VA and military health facilities, prevention and wellness programs, and primary care providers practicing in underserved communities; and
• Research on health care services and treatments.
Children's Health One Pager (pdf)
Stimulus Funding and Healthcare One Pager (pdf)
Private Health Insurance One Pager (pdf)
