TOMMY WILLIAMS

Texas State Senator District 4
Committees: Finance, Chair State Affairs Open Government Administration

For Immediate Release February 26, 2013

Contact: Gary Scharrer 512-463-0104

EDITORIAL

A Federal Government Forced "One-Size-Fits-All" Medicaid Expansion Is Wrong and Too Costly for Texas
By State Senator Tommy Williams (R-The Woodlands) Chairman of the State Senate Finance Committee

Medicaid today is an inefficient, broken federal program needing to be fixed
before any expansion occurs. Medicaid, as we know it, cannot continue without breaking our state budget or drowning the federal government in more massive debt. On the surface, Medicaid expansion sounds worthy as it would provide health care to an estimated 1.8 million additional Texans and $100 billion in federal funding over 10 years to Texas while the state puts up approximately $15 billion. But pouring all that money into an inefficient and broken system makes absolutely no sense. Medicaid expansion wrapped inside a one-size-fits-all federal package is not good for Texas.

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Page Two of Five Sen. Williams ~ 2.26.13

Texas needs flexibility to administer a Texas solution unique to our state's Medicaid population, versus the current system obligating us to offer everything - or nothing. Some Medicaid patients may need only two or three services so forcing Texas to provide more services than a patient actually needs is simply inefficient, costly and fairly ridiculous. We need to provide health care to Texans without the means to help themselves. However, we must be more efficient in how we provide that care. Patients without health care options end up using expensive emergency room services for what should be routine medical care. Taxpayers are paying for an inefficient system funded by property taxes to cover uncompensated health care in our local public hospitals - and with higher insurance premiums to cover the cost of our uninsured population. A one-size approach doesn't allow Texas to develop ways to encourage healthy habits, program efficiencies or allow Texas to target the program's growing fraud and abuse in more meaningful and effective ways. In the past 10 years, the Medicaid Fraud Control Unit in the Texas Attorney General's office has identified more than $770 million in suspected Medicaid overpayments. The office also has obtained more than 800 criminal convictions. In (FY) 2012, the attorney general's office opened up 418 Medicaid fraud and abuse cases, recouped $21.5 million and excluded 412 providers. As a taxpayer, a businessman and an elected steward of our tax dollars, I am very concerned about costs. Presently, Texas pays 40 percent of the - MORE -

Page Three of Five Sen. Williams ~ 2.26.13

Medicaid costs; the federal government pays 60 percent. In Texas, Medicaid currently costs nearly as much as education when you look at all funding sources. That's never happened before. Since 2000, the state's Medicaid share has nearly tripled, climbing to approximately $11 billion per year. At this rate we will be spending more than $30 billion per year in state money by 2024. Stated another way, it simply means the more we spend on Medicaid, the less money we will have for education, highways, mental health services, financial aid for college students and many other important functions. Spiraling Medicaid costs have severely impacted other states, and some states eventually could face bankruptcy unless the trend line changes. Nearly 20 other states are resisting the Medicaid expansion offer, Texas being the largest. Our only leverage with the federal government is to resist expansion until we can design our own more efficient and effective plan. Here are a few elements of what a "Texas Solution to Medicaid" might look like. • Co-pays and deductibles for Medicaid recipients so individuals have skin in the game when it comes to their health care; • Establish reimbursement rates designed to encourage quality patient outcomes and efficient use of taxpayer resources; • Expanded Medicaid "managed care" programs to improve and streamline services, reduce costs and provide quality and costeffective healthcare to serve more Texans;

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• More incentives to encourage Medicaid patients to use routine health care services to reduce costly emergency room care; • Flexibility for Texans to require individuals to enroll in private or employer plans if available; • Flexibility for Texans to develop tailored benefit packages for healthier Medicaid recipients; • Elimination of federal administrative reporting requirements and the complicated federal approval process to make minor Medicaid changes. In other words, more decision-making for states and less "mother, may I?"

Any expansion of Medicaid must allow Texas to pull out of the program if the federal government fails to honor its funding commitment of the expanded program. Because expansion is not set to begin until 2014, I believe we have time to draft a solution to ensure people who need health care will get it, and the Texas taxpayer won't go broke in the process. The worst possible outcome: Federal officials decline to help Texas improve Medicaid. The status quo continues for patients and providers. Our tax dollars go to other states for their expanded and broken Medicaid - and to local, public hospitals to help cover uncompensated health care. Private health insurance premiums also continue to rise to help support uncompensated health care. - MORE -

Page Five of Five Sen. Williams ~ 2.26.13

The current system is neither rational nor efficient. That's why Medicaid must be fixed before it is expanded.

Senator Williams represents Senate District 4 covering all or portions of Montgomery, Chambers, Harris, Jefferson and Galveston Counties, and serves as Chairman of the Texas Senate Finance Committee and is a member of the Senate State Affairs, Open Government and Administration Committees.

Beaumont Office: P.O. Box 5819 Beaumont, Texas 77726-5819 (409) 896-2350

Capitol Office: Room 1E.15 P.O. Box 12068 Austin, Texas 78711 (512) 463-0104 (888) 668-1227

The Woodlands Office: P.O. Box 8069 The Woodlands, Texas 77387-8069 (281) 364-9426

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