Thank you, Mr. Bush!
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April 9, 2004, 9:22PM
Shortage predicted in state health funds
By R.G. RATCLIFFE
Copyright 2004 Houston Chronicle Austin Bureau
AUSTIN -- The state's health care programs for low-income Texans will run a $582 million deficit by the end of the current budget, state officials told the Houston Chronicle on Friday.
State officials say it is because of a higher than expected caseload, but the shortfall is close to the amount legislators shifted out of the Medicaid budget last spring while trying to balance a tight budget.
The Texas Health and Human Services Commission is preparing a report explaining why there is a projected $529 million shortfall in state funding for the Medicaid program and a $53 million deficit for the Children's Health Insurance Program, said commission spokeswoman Kristie Zamrazil.
Total state funding for the programs in the state's two-year budget was $7.3 billion for Medicaid and $280 million for CHIP, she said. Zamrazil said the shortfall is a result of unanticipated caseloads.
However, during last year's budget debates House Republicans stripped $524 million from Medicaid and transferred the money to public education while fighting to overcome a $10 billion state budget shortfall. Democrats at the time warned that the transfer would lead to a Medicaid shortfall in the current budget cycle.
Gov. Rick Perry's spokeswoman, Kathy Walt, said budget writers at the time had been trying to take advantage of expected savings they thought would be generated by a social services overhaul.
"What the Legislature was doing was trying to estimate the impact of policy changes that were contained in House Bill 2292 (the overhaul bill) and accurately project how those changes would impact health and human services programs," Walt said.
She said the Legislature has $420 million to $580 million in unspent federal funds that can be used to balance the current shortfall in the health care programs.
"One of the approaches the Legislature took, which the governor totally agreed on, was taking that federal ... money that came in and setting aside a portion of that for meeting unanticipated needs in the second year of the biennium," Walt said.
"If that money was not needed for unanticipated needs, there was a priority list for funding additional programs. So there is money there to address these kinds of situations should these projections hold true."
Walt questioned whether the preliminary caseload estimates would hold true over the next 18 months of the state's budget.
"These projections are preliminary numbers six months through the first half of the first year of the biennium," Walt said. "They may hold true. They may not."
House Appropriations Committee Chairman Rep. Talmadge Heflin, R-Houston, said the projected budget shortfall underscores why it was important for the governor to hold off spending the federal funds rather than restore service cuts to CHIP, Medicaid and other social programs as Democrats wanted.
He noted that in 2003 the Legislature faced a $500 million shortfall in Medicaid when caseloads exceeded budget projections.
At that time budget writers passed an emergency appropriations bill to cover the extra cost, although federal funding in reserve might help the state avoid doing that this time, Heflin said.
Others said they aren't surprised by the numbers, noting the House transfer of funds from Medicaid to education in last year's budget battle.
"I don't think anybody would be surprised if there was a caseload shortfall, but caseloads have not grown very much at all," said Anne Dunkelberg, health policy analyst at the Center for Public Policy Priorities, a think tank that monitors issues affecting low-income Texans.
Rep. Garnet Coleman, D-Houston, said he was especially surprised to see a projected shortfall for CHIP, since children are falling off the program's rolls at a faster rate than anticipated.
He said lawmakers anticipated that changes in eligibility and more frequent certifications would drop 161,000 children from CHIP in the course of the biennium.
Less than halfway through the budget cycle, however, he said all but 40,000 of that estimate have already dropped off the program.
"It must be something like (cost overruns for) prescription drugs or something else, because more kids are off CHIP than expected," he said.
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