Medicaid Lawsuit Ruling Could Blow A Hole In The Budget

Posted in 80th Legislature, The Budget at 12:29 pm by wcnews

Not only that, but it more than likely wipes out any hope of putting money back into CHIP, higher education, or many other worthwhile programs, that need it. Thankfully the property tax cuts have already passed through this legislature, so they’re safe! Our state “leaders” always seem to take care of the most important items first.
Kuff mentioned this issue last week:

The fate of the CHIP expansion also may be affected by an unrelated federal lawsuit over Medicaid that is expected to dump additional health care expenses on the state this spring.

The Medicaid suit could cost the state hundreds of millions of dollars if, as expected, U.S. District Judge William Wayne Justice forces Texas to finally comply with an 11-year-old agreement to expand health care to thousands of other low-income children.

“I’m told a decision will be coming out in April, and I’m trying to ascertain what the effect of this type of decision will be fiscally on the state of Texas,” Dewhurst said.

Sen. Bob Deuell, R-Green-ville, said he has heard estimates as high as $5 billion a year if Justice grants all of the requests by the plaintiffs’ attorney in the class action case known as Frew v. Albert Hawkins, Health and Human Services Commissioner.

Texas lost its latest effort to avoid compliance when the U.S. Supreme Court refused to hear a state appeal in January of the Frew case. Justice has scheduled an April 9 hearing and is expected to order the state to improve funding for children’s Medicaid.

Makes one wonder if our state leaders didn’t see this coming and needed to make sure those tax cuts got passed before this cat was let out of the bag.

From today’s AAS, Medicaid lawsuit could cost state billions. We learn that Sen. Ogden is very aware of the freight train coming down the tracks:

The uncertainty could slow, or halt, efforts to increase spending on the Children’s Health Insurance Program, college financial aid, pre-kindergarten and other programs.

“What the Legislature probably needs to do is to hold back some money and avoid expanding any discretionary programs until we get some guidance from the federal judge,” Senate Finance Committee Chairman Steve Ogden, R-Bryan, said.


The legislative session began less than two months ago with talk of record budget surpluses. The lurking Frew lawsuit, however, has changed that mood.

“Everybody’s in this budget trying to basically expand CHIP. . . expand this, expand that,” Ogden said. “I think prudence would dictate that we be very cautious about any expansion until we find out what our obligations are under mandatory programs, and we ought to hold some money back. No one thinks the opinion is going to be free.”

Don’t forget that half of the “surplus” was gobbled up by the GOP property tax swap scheme perpetrated on Texas tax payers last year. This pending ruling will delay major decisions about the budget until after is released in April. That should only help cloud the decision making process as the end of session nears.

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