Lucio Masthead Graphic
March 25, 2010
Contact: Doris Sanchez, Communications Director
Budget Cuts to HHSC Negatively Impact Most Needy Texans

As the Texas Legislature begins gearing up for another legislative session set to begin January 2011, the budget once again takes center stage.

Grappling with a struggling economy, we legislators have begun taking steps toward preparing ourselves financially for the future.

The Governor, Speaker of the House and Lieutenant Governor have asked state agencies to submit proposals outlining ways to cut five percent from their own budgets.

The five percent reductions will be for fiscal years 2010-2011, so that does not necessarily mean that more cuts will not be made for the next biennium.

In monitoring the various proposals over the past few weeks, I cannot help but wonder if across-the-board cuts are ultimately the best approach.

On Feb. 11, the Health and Human Services Commission (HHSC) held a public hearing to outline their proposed budget cuts. The agency was charged with making these decreases without reducing funding for the Children's Health Insurance Program (CHIP), Medicaid community care, foster care and adoption subsidies.

Agency leaders set these parameters, and I applaud them for protecting these programs. However, HHSC was still left with the daunting task of reducing its own budget by five percent like every other agency.

HHSC is proposing a one percent Medicaid provider reimbursement reduction. In practice, this means doctors will be paid even less for their services.

Further, although this one percent cut will help the Commission reach their five percent budget reduction, it will cost the state an estimated $175 million in federal matching funds.

Many areas in Texas, including South Texas, currently suffer from provider shortages, so further reducing reimbursement rates for Medicaid will only continue to discourage providers from accepting Medicaid or practicing in socio-economically disadvantaged areas.

Medicaid will additionally be affected by delaying a piece of legislation passed by my son, Representative Eddie Lucio III, which would allow parents to buy into the Medicaid program for their children with disabilities. The Commission is currently proposing delaying implementation of the legislation for roughly six months, again for budgetary purposes.

Further, mental health services appear to be in jeopardy under HHSC's proposal. Fifty beds in Rusk, North Texas, San Antonio and Terrell Hospitals will be cut, resulting in 207 fewer patients being served and 420 jobs lost by 2011.

Hiring freezes have also been implemented at each agency within HHSC. In short, jobs are not being created, government is simply adding to the unemployment rate.

Meanwhile, as the economy continues to trudge along with a lackluster forecast nationally, the state is feeling the impact through new enrollees in government benefits distributed by HHSC.

Currently, the Commission is facing a 55.5 percent increase in first-time Supplemental Nutrition Assistance Program (SNAP) food benefit requests, totaling $405 million in benefits issued to more than 3.3 million recipients in March of this year, compared to $221.4 million issued to 2.3 million in March of 2008.

The agency is also facing an 11.1 percent increase in Acute Care Medicaid caseloads this year alone, along with a 7.4 percent increase for 2011. This is an agency with growing demands being forced to reduce a budget that distributes services many Texans rely on for basic survival.

As a member of the Senate Committee on Finance, I know difficult choices need to be made, and yes, like all Texans, government needs to tighten its belt and reduce spending. However, requiring HHSC to make five percent cuts hardly seems fair when the population they serve is made up of children, elderly, sick and disabled Texans.

How many need to continue to be denied services? How many jobs will continue to be lost? These are the tough questions we must try to resolve.

Staff Member Sara Gonzalez handles health issues for Senator Lucio and can be reached at 512-463-0127.