Texans Who Rely On Medicaid Are In Big Trouble

The Texas Medicaid system is going through some major changes and millions of Texans are losing access to care.

The first problem is the return of Medicaid eligibility checks last year. During COVID, millions of Texans were allowed to remain on Medicaid, no questions asked. This was coupled with federal expansion of Medicaid to help low-income Americans weather the pandemic.

Those programs expired in April 2023. Since then, about 2 million Texans have lost coverage, mostly children. Many lost coverage thanks to the state’s famously stringent requirements to apply, often failing to fill out paperwork as needed or giving up during the lengthy, labyrinthian process.

A drop in the number of Texans on Medicaid also means a drop in the payments going to the state’s 650 community health centers. These centers serve the state’s poorest residents, and now they are looking at major losses in income as those patients cease treatment with the loss of Medicaid. In addition, chronic physical and mental health conditions that were previously managed under Medicaid become more acute as patients go without treatment when they lose coverage.

A major part of this issue is Texas’s continued refusal to accept the Medicaid expansion under the Affordable Care Act. Texas is one of the last holdouts, with Governor Greg Abbott calling it a “tax increase waiting to happen.” Meanwhile, roughly 1.8 million Texans who would be eligible for Medicaid under that system go without.

This week, Medicaid coverage took another hit as Texas Children’s Health Plan announced they were poised to lose their Medicaid contract. Non-profit hospital systems like Texas Children’s bid to the Texas Health and Human Services department to provide service for Medicaid STAR and CHIP patients that include children in low-income families and pregnant people. Texas HHS has denied their application to be part of the Medicaid program.

Texas Children’s covers 450,000 people, most of whom will have to scramble to find new insurance. The hospital plans to appeal the decision. Among its complaints is that the new bidding system failed to give preferential treatment to them as they are currently required under state law.

This is an ongoing problem. Republicans in the state legislature tried last year to end the preferential treatment of non-profits when assigning contracts. While couched in terms of streamlining Medicaid payments to physicians (which earned the support of the Texas Medical Association), the result would introduce more for-profit medical providers to the system. Those companies can underbid the non-profits by slashing unprofitable services. Unlike groups like Texas Children’s Health Plan, which were specifically founded to bring care to poor populations, these for-profit endeavors need only keep open providers that help their bottom line.

This will ultimately contribute to the continued decline of service for Texans in underserved areas, including the continued closing of unprofitable rural hospitals. As Medicaid contracts, the providers that rely on it to make ends meet in economically-depressed areas go out of business or vastly restrict what they can offer.