Medicaid redesign tied to federal approval

The text as introduced · 2,223 words

89R4783 CMO-F

By: Lalani
H.B. No. 1903

A BILL TO BE ENTITLED

AN ACT

relating to a "Texas Way" to reforming and addressing issues

related to the Medicaid program, including the creation of an

alternative program designed to ensure health benefit plan coverage

to certain low-income individuals through the private marketplace.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

ARTICLE 1. BLOCK GRANT FUNDING SYSTEM FOR STATE MEDICAID PROGRAM

SECTION 1.01. Subtitle I, Title 4, Government Code, is

amended by adding Chapter 532A to read as follows:

CHAPTER 532A. BLOCK GRANT FUNDING SYSTEM FOR STATE MEDICAID

PROGRAM

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 532A.0001. DEFINITIONS. Notwithstanding Section

521.0001, in this chapter:

(1) "Health benefit exchange" means an American Health

Benefit Exchange administered by the federal government or an

exchange created under Section 1311(b) of the Patient Protection

and Affordable Care Act (42 U.S.C. Section 18031(b)).

(2) "Medicaid program" means the medical assistance

program established and operated under Title XIX, Social Security

Act (42 U.S.C. Section 1396 et seq.).

(3) "State Medicaid program" means the medical

assistance program provided by this state under the Medicaid

program.

Sec. 532A.0002. FEDERAL AUTHORIZATION TO REFORM MEDICAID

REQUIRED. If the federal government establishes, through

conversion or otherwise, a block grant funding system for the

Medicaid program or otherwise authorizes the state Medicaid program

to operate under a block grant funding system, including under a

Medicaid program waiver, the commission, in cooperation with

applicable health and human services agencies, shall, subject to

Section 532A.0003, administer and operate the state Medicaid

program in accordance with this chapter.

Sec. 532A.0003. CONFLICT WITH OTHER LAW. To the extent of a

conflict between this chapter and:

(1) a state law, this chapter controls, subject to

Section 545A.0002(b); and

(2) a federal law or any authorization described under

Section 532A.0002, the federal law or authorization controls.

Sec. 532A.0004. ESTABLISHMENT OF REFORMED STATE MEDICAID

PROGRAM. The commission shall establish a state Medicaid program

that provides benefits under a risk-based Medicaid managed care

model.

Sec. 532A.0005. RULES. The executive commissioner shall

adopt rules necessary to implement this chapter.

SUBCHAPTER B. ACUTE CARE

Sec. 532A.0051. ELIGIBILITY FOR MEDICAID ACUTE CARE. (a)

An individual is eligible to receive acute care benefits under the

state Medicaid program if the individual:

(1) has a household income at or below 100 percent of

the federal poverty level;

(2) is 18 years of age or younger and:

(A) is receiving Supplemental Security Income

(SSI) under 42 U.S.C. Section 1381 et seq.; or

(B) is in foster care or resides in another

residential care setting under the conservatorship of the

Department of Family and Protective Services; or

(3) meets the eligibility requirements that were in

effect in this state on August 31, 2025.

(b) The commission shall provide acute care benefits under

the state Medicaid program to each individual eligible under this

section through the most cost-effective means, as the commission

determines.

(c) If an individual is not eligible for the state Medicaid

program under Subsection (a), the commission shall refer the

individual to the program established under Chapter 545A that helps

connect eligible residents with health benefit plan coverage

through private market solutions, a health benefit exchange, or any

other resource the commission determines appropriate.

Sec. 532A.0052. MEDICAID SLIDING SCALE SUBSIDIES. (a) An

individual who is eligible for the state Medicaid program under

Section 532A.0051 may receive a Medicaid sliding scale subsidy to

purchase a health benefit plan from an authorized health benefit

plan issuer.

(b) A sliding scale subsidy provided to an individual under

this section must:

(1) be based on:

(A) the average premium in the market; and

(B) a realistic assessment of the individual's

ability to pay a portion of the premium; and

(2) include an enhancement for individuals who choose

a high deductible health plan with a health savings account.

(c) The commission shall ensure that counselors are made

available to individuals receiving a subsidy to advise the

individuals on selecting a health benefit plan that meets the

individuals' needs.

(d) An individual receiving a subsidy under this section is

responsible for paying:

(1) any difference between the premium costs

associated with the purchase of a health benefit plan and the amount

of the individual's subsidy under this section; and

(2) any copayments associated with the health benefit

plan, except to the extent the individual receives an additional

subsidy under Section 532A.0053 to pay the copayments.

(e) If the amount of a subsidy an individual receives under

this section exceeds the premium costs associated with the

individual's purchase of a health benefit plan, the individual may

deposit the excess amount in a health savings account that may be

used only in the manner described by Section 532A.0054(b).

Sec. 532A.0053. ADDITIONAL COST-SHARING SUBSIDIES. In

addition to providing a subsidy to an individual under Section

532A.0052, the commission shall provide additional subsidies for

coinsurance payments, copayments, deductibles, and other

cost-sharing requirements associated with the individual's health

benefit plan. The commission shall provide the additional

subsidies on a sliding scale based on income.

Sec. 532A.0054. DELIVERY OF SUBSIDIES; HEALTH SAVINGS

ACCOUNTS. (a) The commission shall determine the most appropriate

manner for delivering and administering subsidies provided under

Sections 532A.0052 and 532A.0053. In determining the most

appropriate manner, the commission shall consider depositing

subsidy amounts for an individual in a health savings account

established for that individual.

(b) A health savings account established under this section

may be used only to:

(1) pay health benefit plan premiums and cost-sharing

amounts; and

(2) if appropriate, purchase health care-related

goods and services.

Sec. 532A.0055. MEDICAID HEALTH BENEFIT PLAN ISSUERS AND

MINIMUM COVERAGE. The commission shall allow any health benefit

plan issuer authorized to write health benefit plans in this state

to participate in the state Medicaid program. The commission in

consultation with the commissioner of insurance shall establish

minimum coverage requirements for a health benefit plan to be

eligible for purchase under the state Medicaid program, subject to

the requirements specified by this chapter.

Sec. 532A.0056. REINSURANCE FOR PARTICIPATING HEALTH

BENEFIT PLAN ISSUERS. (a) The commission in consultation with the

commissioner of insurance shall study a reinsurance program to

reinsure participating health benefit plan issuers.

(b) In examining options for a reinsurance program, the

commission and the commissioner of insurance shall consider a plan

design under which:

(1) a participating health benefit plan is not charged

a premium for the reinsurance; and

(2) the health benefit plan issuer retains risk on a

sliding scale.

SUBCHAPTER C. LONG-TERM SERVICES AND SUPPORTS

Sec. 532A.0101. PLAN TO REFORM DELIVERY OF LONG-TERM

SERVICES AND SUPPORTS. The commission shall develop a

comprehensive plan to reform the delivery of long-term services and

supports that is designed to achieve the following objectives under

the state Medicaid program or any other program created as an

alternative to the state Medicaid program:

(1) encourage consumer direction;

(2) simplify and streamline the provision of services;

(3) provide flexibility to design benefits packages

that meet the needs of individuals receiving long-term services and

supports under the program;

(4) improve the cost-effectiveness and sustainability

of the provision of long-term services and supports;

(5) reduce reliance on institutional settings; and

(6) encourage cost-sharing by family members when

appropriate.

ARTICLE 2. PROGRAM TO ENSURE HEALTH BENEFIT COVERAGE FOR CERTAIN

INDIVIDUALS THROUGH PRIVATE MARKETPLACE

SECTION 2.01. Subtitle I, Title 4, Government Code, is

amended by adding Chapter 545A to read as follows:

CHAPTER 545A. PROGRAM TO ENSURE HEALTH BENEFIT PLAN COVERAGE FOR

CERTAIN INDIVIDUALS THROUGH PRIVATE MARKET SOLUTIONS

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 545A.0001. DEFINITION. In this chapter, "state

Medicaid program" has the meaning assigned by Section 532A.0001.

Sec. 545A.0002. CONFLICT WITH OTHER LAW. (a) Except as

provided by Subsection (b), to the extent of a conflict between this

chapter and:

(1) a state law, this chapter controls; and

(2) a federal law or any authorization described under

Subchapter B, the federal law or authorization controls.

(b) The program operated under this chapter is in addition

to the state Medicaid program operated under Chapter 32, Human

Resources Code, or under a block grant funding system under Chapter

532A.

Sec. 545A.0003. PROGRAM FOR HEALTH BENEFIT PLAN COVERAGE

THROUGH PRIVATE MARKET SOLUTIONS. Subject to the requirements of

this chapter, the commission in consultation with the commissioner

of insurance shall develop and implement a program that helps

connect certain low-income residents of this state with health

benefit plan coverage through private market solutions.

Sec. 545A.0004. NOT AN ENTITLEMENT. This chapter does not

establish an entitlement to assistance in obtaining health benefit

plan coverage.

Sec. 545A.0005. RULES. The executive commissioner shall

adopt rules necessary to implement this chapter.

SUBCHAPTER B. FEDERAL AUTHORIZATION

Sec. 545A.0051. FEDERAL AUTHORIZATION FOR FLEXIBILITY TO

ESTABLISH PROGRAM. (a) The commission in consultation with the

commissioner of insurance shall negotiate with the United States

secretary of health and human services, the Centers for Medicare

and Medicaid Services, and other appropriate persons for purposes

of seeking a waiver or other authorization necessary to obtain the

flexibility to use federal matching funds to help provide, in

accordance with Subchapter C, health benefit plan coverage to

certain low-income individuals through private market solutions.

(b) Any agreement reached under this section must:

(1) create a program that is made cost neutral to this

state by:

(A) leveraging premium tax revenues; and

(B) achieving cost savings through offsets to

general revenue health care costs or the implementation of other

cost savings mechanisms;

(2) create more efficient health benefit plan coverage

options for eligible individuals through:

(A) program changes that may be made without the

need for additional federal approval; and

(B) program changes that require additional

federal approval;

(3) require the commission to achieve efficiency and

reduce unnecessary utilization, including duplication, of health

care services;

(4) be designed with the goals of:

(A) relieving local tax burdens;

(B) reducing general revenue reliance so as to

make general revenue available for other state priorities; and

(C) minimizing the impact of any federal health

care laws on Texas-based businesses; and

(5) afford this state the opportunity to develop a

state-specific way of providing benefits that specifically meets

the unique needs of this state's population.

(c) An agreement reached under this section may be:

(1) limited in duration; and

(2) contingent on continued funding by the federal

government.

SUBCHAPTER C. PROGRAM REQUIREMENTS

Sec. 545A.0101. ENROLLMENT ELIGIBILITY. (a) Subject to

Subsection (b), an individual may be eligible to enroll in a program

designed and established under this chapter if the individual:

(1) is 64 years of age or younger;

(2) has a household income at or below 133 percent of

the federal poverty level; and

(3) is not otherwise eligible to receive benefits

under the state Medicaid program, including through a program

operated under Chapter 32, Human Resources Code, or under Chapter

532A through a block grant funding system or a waiver, other than a

waiver granted under this chapter, to the program.

(b) The executive commissioner may modify or further define

the eligibility requirements of this section if the commission

determines it necessary to reach an agreement under Subchapter B.

Sec. 545A.0102. MINIMUM PROGRAM REQUIREMENTS. A program

designed and established under this chapter must:

(1) if cost-effective for this state, provide premium

assistance to purchase health benefit plan coverage in the private

market, including health benefit plan coverage offered through a

managed care delivery model;

(2) provide enrollees with access to health benefits,

including benefits provided through a managed care delivery model,

that:

(A) are tailored to the enrollees;

(B) provide levels of coverage that are

customized to meet health care needs of individuals within defined

categories of the enrolled population; and

(C) emphasize personal responsibility and

accountability through flexible and meaningful cost-sharing

requirements and wellness initiatives, including through

incentives for compliance with health, wellness, and treatment

strategies and disincentives for noncompliance;

(3) include pay-for-performance initiatives for

private health benefit plan issuers that participate in the

program;

(4) use technology to maximize the efficiency with

which the commission and any health benefit plan issuer, health

care provider, or managed care organization participating in the

program manage enrollee participation;

(5) allow recipients under the state Medicaid program

to enroll in the program to receive premium assistance as an

alternative to the state Medicaid program;

(6) encourage eligible individuals to enroll in other

private or employer-sponsored health benefit plan coverage, if

available and appropriate;

(7) encourage the utilization of health care services

in the most appropriate low-cost settings; and

(8) establish health savings accounts for enrollees,

as appropriate.

SECTION 2.02. The Health and Human Services Commission in

consultation with the commissioner of insurance shall actively

develop a proposal for the authorization from the appropriate

federal entity as required by Subchapter B, Chapter 545A,

Government Code, as added by this article. As soon as possible

after the effective date of this Act, the Health and Human Services

Commission shall request and actively pursue obtaining the

authorization from the appropriate federal entity.

ARTICLE 3. FEDERAL AUTHORIZATION AND EFFECTIVE DATE

SECTION 3.01. Subject to Section 2.02 of this Act, if before

implementing any provision of this Act a state agency determines

that a waiver or authorization from a federal agency is necessary

for implementation of that provision, the agency affected by the

provision shall request the waiver or authorization and may delay

implementing that provision until the waiver or authorization is

granted.

SECTION 3.02. This Act takes effect September 1, 2025.