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Gov. Perry and U.S. Department of Health and Human Services Secretary Leavitt Discuss Restructuring Medicaid

Location: Austin, TX

Gov. Perry and U.S. Department of Health and Human Services Secretary Leavitt Discuss Restructuring Medicaid

Gov. Rick Perry today joined U.S. Department of Health and Human Services (HHS) Secretary Michael Leavitt and state lawmakers to discuss restructuring the state's Medicaid program. As the cost of managing the Medicaid program continues to grow, the state must develop new approaches to sustain the program that serves 2.7 million vulnerable, disabled and elderly Texans.

"Texas cannot continue to take a ‘one size fits all' approach to Medicaid," Perry said. "Escalating costs and increasing enrollment has made our current system unsustainable. Together, with our state and federal partners, we must develop a more flexible and efficient system of providing safe, quality medical care to those who need it most."

In 10 years (1994 to 2004), the cost of Medicaid doubled in Texas, now constituting 26 percent of the state's budget. In the near future, Gov. Perry will suggest reforming Texas' Medicaid program through:

* Providing customized benefit packages for specific populations;
* Providing assistance for enrollment in private insurance and employer-sponsored plans; and
* Promoting consumer choice through health savings accounts and consumer directed services.

At today's event, Perry emphasized the importance of greater flexibility in managing diverse Medicaid populations. Children represent 70 percent of the Medicaid population and only 30 percent of the cost, while the elderly and those with special needs represent 21 percent of the Medicaid population and account for about 60 percent of the cost.

"The best insurance plan for pregnant women and children is not the same as the best plan for elderly Texans who need long-term care," Perry said. "I would like to create Medicaid benefit packages that target specific groups, such as a plan for healthy children and adults, a separate plan for children with special needs, and a third plan for adults with disabilities and long-term care needs."

Yesterday, HHS awarded Texas $4 million for Medicaid "transformation grants" to support the development of electronic health passports for children in foster care. Electronic health passports ensure greater continuity of care for a population of children that often receives treatment from a variety of physicians due to changing living arrangements.

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