Texas Medicaid Shake-up Risks Upending Nearly 2 Million People

A major shift in Texas Medicaid could end up removing 2 million people from the government-provided health care insurance.

The state plans to remove some of its largest nonprofit children's health plans from Medicaid, which could see low-income families go without health insurance entirely.

Roughly 1.8 million Texans would soon be without insurance if the plans from Texas Health and Human Services move through, according to The Texas Tribune. That includes 700,000 families, pregnant women and children under the Cook Children's Health Plan, Texas Children's Health Plan and the Driscoll Health Plan, depending on their location.

That means the Dell Children's Health Plan in Austin would be the only Medicaid plan left run by a children's hospital.

There's still hope that these Texans could keep coverage, but it's unclear when the final decision will be made. While not officially approved, the Texas Health and Human Services Commission (HHSC) looked to implement the new process a few years back but is facing significant pushback.

An April 3 letter from a bipartisan group of Texas lawmakers shared "deep concerns" for the new plan with Governor Greg Abbott and Texas HHSC Executive Commissioner Cecile E. Young.

"It is important that the decision-making process acknowledges the significant contributions and expertise of DHP in addressing the healthcare needs of our region," the letter said. "HHSC did not take into consideration our communities' needs and preferences, nor did it seek input from legislators, providers or other stakeholders impacted by the decision."

Newsweek reached out to HHSC, but the agency said it could not comment on procurements until contracts are awarded.

Texas's Medicaid STAR and CHIP plans cover patients' routine and emergency medical services. While STAR covers pregnant women and low-income children, CHIP is typically available to children living in low-income households who don't qualify for Medicaid.

For the children's hospitals targeted by HHSC, both plans have been disrupted, which would lead to the loss of coverage for millions. Already, a larger number of children in Texas receive help through the CHIP program as the state has some of the strictest Medicaid criteria in the country.

But if the Medicaid shakeup happens, half of these STAR and CHIP enrollees would need to start looking for new coverage. If the change takes effect, many national for-profit chains could benefit, but those against the plan are asking Young to delay the decision so lawmakers can respond with further government guidelines on the state's Medicaid process.

Until recently, the federal government protected residents in Texas and all states from being removed from Medicaid due to a continuous coverage pandemic-era rule.

However, since the rule ended this year, Texas has removed millions from the health insurance plan, with 1.3 million of them children. If the new Medicaid procurement process goes through, even more would be left without health insurance.

There would also be less money invested in certain health programs, as the Driscoll Health Plan invests $10 million yearly in maternal fetal medicine, funding 75 percent of the specialist providers in South Texas. Since investing, South Texas has seen fewer preterm births and lower maternal mortality rates. It also contributed $100 million in yearly health care savings.

"HHSC has an established process by which we can challenge this decision, and we have done so," Gerardo Muyshondt, senior director of marketing and community relations for Driscoll Children's Hospital, told Newsweek. "We have requested that the decision be delayed allowing state lawmakers to seek a more collaborative and open process for awarding these Medicaid contracts."

Meanwhile, Cook Children's Health Plan has supported community health, helping to implement several clinics in areas Texans might otherwise have not been able to see a doctor.

"Texas Health and Human Services has not explained their decision. Perhaps because they can't," Karen Love, president of Cook Children's Health Plan, told Newsweek. "This was a flawed process that produced the wrong result. The 1.8 million impacted Texans, including the 125,000 families we serve locally in this program, deserve better."

Love said Cook Children's Health plans to fight the decision every step of the way, even if it ends up being passed.

"We have already protested the decision, and an appeal will follow if necessary," Love said. "We are working to overturn this decision because Texas Health and Human Services used a new, untested and flawed scoring process during procurement that was not subjected to the appropriate public review process."

Michael Murphy, Texas Children's Health Plan president, echoed Love's statement. He said Texas Children's is "deeply disappointed" that they weren't awarded STAR or CHIP contracts.

"As the only Medicaid and CHIP health plan affiliated with a children's hospital serving the 20 counties in the Harris and Jefferson service areas, the decision not to award Texas Children's Health Plan a Medicaid and CHIP contract is unnecessarily disruptive and jeopardizes the care of 450,000 of the state's most vulnerable beneficiaries," Murphy told Newsweek.

"We want to assure all Texas Children's Health Plan members and their families that there will be no disruptions in coverage at this time and that the health of our members remains our top priority."