Policy Documents

The Medicaid Problem in Texas

State Representative Arlene Wohlgemuth –
January 1, 2002

 In this document, State Representative Arlene Wohlgemuth explains that at the 2001 Legislative Session, there was much wailing and gnashing of teeth about how the State of Texas would have to “tighten its belt” and emerge with what would surely be the leanest budget in years. As it turns out, “tightening” the State’s belt meant increasing the budget to $114 billion, an increase of $16 billion from the previous budget. 

Nationwide, many states are reporting that budget surpluses are gone and that health care costs are driving their budgets. While each state has its own unique budget system and budget woes, there is one common thread – Medicaid. Texas is no exception.  The State budget stands at $114 billion. Of this amount, $35 billion is dedicated to spending on health and human services. Of the $35 billion, approximately $27 billion will be spent on Medicaid (and it is very likely that this number will be much higher). So, when people in Austin are talking about spending on health and human services, they are really talking about spending on Medicaid. 

  • The author offers many ideas at Medicaid reform, which include:
  • Medicaid needs a realistic sliding scale to determine eligibility. 
  • The benefit package in Medicaid needs to match the real world.  
  • “Block grant” Medicaid to the states.