The current federal budget includes significant reductions in funding for federal health care programs. Reductions in subsidies for Affordable Care Act (ACA) premiums are effective January 1. Reductions in federal payments to states for Medicaid services will be effective in the next fiscal year. Estimates from the Congressional Budget Office indicate that these reductions will result in significant increases in uncompensated services by hospitals and other medical providers for indigent patients at the local level.
Although Texas still has the largest number of uninsured residents, federal assistance through the ACA and the Medicaid 1115 Waiver has reduced the percentage of uninsured residents by 50 percent in the past 10 years. These programs lessened the demand for services from local medical assistance programs provided by counties and hospital districts. The reduction in federal funding for these programs will increase the dependence on these local programs.
Under Chapter 61, Health and Safety Code, the 153 counties without a countywide public hospital are required to fund and administer a county indigent health care program. These counties will need to monitor the enrollment of residents and requests for payment by local health care providers carefully in the next two years. The Commissioners Court should receive monthly reports on enrollment and expenditures from the county indigent health care coordinator.
Chapter 61 contains some significant safeguards for county taxpayers. Under Section 61.006(b), the county is only required to provide services to residents with an income at or below 21 percent of the federal poverty level. Under Section 61.023(b), some counties have adopted a higher income eligibility level, up to 50 percent of the poverty level. If costs and demand increase, these Commissioners Courts may consider reducing the eligibility level to the minimum 21 percent. Changes in the eligibility level must be adopted by September 1 under Section 61.024(c).
Under Section 61.022(b), the county is the payor of last resort and shall provide assistance only if other adequate public or private sources of payment are not available. County indigent health care coordinators screen applicants for eligibility for other programs before approving for the county program. Of course, if eligibility for Medicaid is reduced, additional applicants will qualify for the county program.
In addition to the basic health care services required under Section 61.028, a county may provide certain optional health care services under Section 61.0285. If costs exceed the budget, the Commissioners Court may reconsider the list of optional health care services.
Under Section 61.034, the county is only required to pay the Medicaid rate for services. With the reduction in federal funding, the state may reduce the Medicaid payment rate. The county should monitor any change in the Medicaid rates and reduce its payments accordingly.
Under Section 61.035, the maximum county liability for health care services to all providers is $30,000 for each resident per state fiscal year. The county should monitor its payments for each approved resident to apply this maximum.
Section 61.037 provides that the state will reimburse a county for 90 percent of all expenditures over 8 percent of the county general revenue tax levy. However, since funding for the federal programs has increased in recent years, few counties have been reaching the 8 percent expenditure level, and the legislature has reduced the appropriation for state reimbursement to $642,796 per year. If the demand for county services increases, more counties will reach the 8 percent threshold, and this reimbursement amount will be insufficient to meet the need. To be eligible for state assistance, the county must file monthly reports and notify the Texas Health and Human Services Commission when it reaches the 6 percent level. The Commissioners Court should also notify its state legislators, especially if the state fund cannot provide the reimbursement.
Last year, counties expended over $515 million on indigent health care services. Counties were reimbursed over $10 million (2 percent) from the Permanent Tobacco Investment Fund and $642,796 (0.0012 percent) from the State General Fund. The remaining $505 million was absorbed by the county taxpayers.
Section 61.039 provides that if the state fails to fund the 90 percent reimbursement, the county may cease making payments for services for the rest of the fiscal year. This is a draconian action since it means that local health care providers will not receive any payments for services to these patients for the rest of the year.
Providers do not make a profit on services provided at Medicaid rates. Their shortfall will be greater if the Medicaid rates are reduced. Reduced payment rates or curtailing services will be particularly harmful in rural Texas where the ability to sustain hospitals and other providers is already difficult. Any reduced ability to provide primary care will result in increased need for more expensive emergency care. Indigent health care counties will need to maintain vigilance over the effect of these coming changes in their programs and communicate the results to their state and federal representatives. The County Judges and Commissioners Association of Texas will monitor the statewide effect and report to our members and representatives.