Medicaid

As of late 2023, 81.4 million people in the United States are covered by Medicaid and around 4.7 million of those individuals reside in Texas.1,2 Medicaid remains the largest payer of mental health services in the country and is continuously covering more substance use services as well.3 Around 40 percent of the non-elderly adult population covered by Medicaid identify as having a mental health or substance use condition, however, not all of this population receives treatment.4

Medicaid and the Children’s Health Insurance Program (CHIP) are administered at the state level, according to federal requirements, and are funded jointly by states and the federal government.5 The federal share of the Medicaid program, known as the federal medical assistance percentage (FMAP), is determined on an annual basis and by a formula that considers each state’s income per capita compared to the U.S. average.6 The matched federal dollars for Medicaid are uncapped, but are capped for CHIP.

Texas Medicaid Eligibility

Financial eligibility is primarily based on household incomes compared to the U.S. HHS definition of the federal poverty level (FPL). Income is determined using Modified Adjusted Gross Income (MAGI), which some groups are excluded from including individuals older than 65, individuals with disabilities, and individuals receiving Supplemental Security Income (SSI).7 There are federal minimums for states to cover Medicaid-eligible groups up to a certain percentage of the FPL, which allows states the flexibility to cover beyond these standards. In 2024, the FPL dependent on family size is:8

Family Size2024 Income
1$15,060
2$20,440
3$25,820
4$31,200
5$36,580
6$41,960
7$47,340
8$52,720
9Add $5,380 for each additional person

The Health and Human Services Commission (HHSC) has been the designated state Medicaid agency for Texas since 1993, administering the program and acting as a liaison between the state and federal government on related issues. The federal government establishes most Medicaid guidelines but grants several important tasks to the states, including:

  • Administering the Medicaid State Plan, which functions as the contract between the agency and the federal government;
  • Establishing Medicaid policies, rules, and provider reimbursement rates; and
  • Establishing eligibility beyond the minimum federal eligibility group.9

To determine program eligibility, Texas considers a variety of factors such as income and family size, age, disability, pregnancy status, citizenship, and state residency requirements. To be eligible for Medicaid in Texas, an individual must be a Texas resident, U.S. national citizen, and meet income and categorical eligibility requirements.10 Categorical eligibility requires that beneficiaries be part of a specific population group. In Texas, this includes low-income children and their families, pregnant women, former foster care youth younger than 26 years old, individuals with disabilities, and people aged 65 and older.11 During the 88th legislative session, Texas passed HB 12 (Rose/Kolkhorst) which extended pregnant women’s Medicaid coverage to 12 months postpartum after a miscarriage or birth.

Texas Medicaid Income Eligibility Levels as of March 202212

Texas Medicaid ProgramsFederal Minimum Income Eligibility Levels (as a percentage of the FPL)If applicable, State optional Income Eligibility Levels (as a percentage of the FPL) 
Pregnant Women and Infants (0-1) 133%198%
Children 1-15 144%n/a
Children 6-18133%n/a
Parents and Care-taker Relatives 13%n/a
Medically Needy 15%n/a
SSI for Aged and Disabled 74%n/a
Long-term Care 74%222%

Most Medicaid clients are children under the age of 18 in Texas. 

Children’s Medicaid Family Maximum Income Eligibility13

Family Members (Adults plus children) Monthly Family Income 
1 (A family of 1 might be a child who does not live with a parent or relative. )$1,616
2$2,186
3$2,756
4$3,325
5$3,895
6$4,465
7$5,035
8$5,604
For each additional person, add: $861

Children’s Health Insurance Program (CHIP)

Children’s Health Insurance Program, known as “CHIP”, is an additional health care program for children without health insurance whose families earn too much to get Medicaid but cannot afford health insurance.14 CHIP fees vary based on family income and may include an enrollment fee of $50 or less per family and co-pays ranging from $3 to $35.15

CHIP Income Guidelines16

Family Members (Adults plus children) Monthly Family Income 
1$2,443
2$3,304
3$4,165
4$5,025
5$5,886
6$6,747
7$7,608
For each additional person, add: $861

Medicaid Waivers

Federal law allows states to apply to Centers for Medicare & Medicaid Services (CMS) for waivers that depart from certain Medicaid requirements. The three allowed waivers are Research and Demonstration 1115 waivers (1115 waivers), Freedom of Choice 1915(b) waivers, and Home and Community-based Services (HCBS) 1915(c) waivers. These allow states to develop alternatives to the traditional Medicaid program. However, because of the limited number of slots per program, there are often extensive waitlists. Certain individuals, such as those in Promoting Independence Initiative or Crisis Diversion, are given priority for available slots. Texas’s waiver programs include:

  • Community Living Assistance and Support Services (CLASS);
  • Deaf Blind with Multiple Disabilities (DBMD);
  • Home and Community-based Services (HCS);
  • Medically Dependent Children Program (MDCP);
  • STAR+PLUS Home and Community-based Services (STAR+PLUS HCBS);
  • Texas Home Living (TxHmL); and
  • Youth Empowerment Services (YES).

YES and Home and Community-based Services-Adult Mental Health (HCBS-AMH) are the only two Medicaid Waiver programs in Texas that provide specialized behavioral health services.17

Service Delivery

Overall, 17 percent of Texans are covered by Medicaid and CHIP, including 47 percent of Texas children. Of total enrollment, Medicaid covers 95 percent of participants and CHIP makes up about 5 percent. Total Medicaid and CHIP funding is approximately $65 billion a biennium, made up of about three quarters federal funds and one quarter state funds.18 These funds make up over a quarter of Texas’s biennial budget, of which about 97 percent is spent on Medicaid and 3 percent on CHIP. Within Medicaid and CHIP, over 80 percent is spent towards client services.19

Most services are delivered through a Managed Care model. Under this model, HHSC contracts with managed care organizations (MCOs), also called health plans. An MCO delivers and manages health services under a risk-based arrangement. HHSC pays them a per member per month (PMPM) rate, or capitation payment. MCOs are required to provide all covered, medically necessary services to their members, and are incentivized to control costs. Medicaid clients generally have a choice between at least two MCOs operating in their service area. Previously, Medicaid was delivered through a fee for service (FFS) model, which is only used in about 3 percent of service’s delivery.20

Federal law stipulates that each state Medicaid program must provide acute care and behavioral health services and long-term services and supports (LTSS). However, states have flexibility in determining whether Medicaid will cover optional services. States with a separate Children’s Health Insurance Program, like Texas, have flexibility in determining benefits. The Texas CHIP benefit package focuses on acute care services, but also includes some behavioral health services and dental benefits. Services covered by Medicaid and CHIP include:

  • Screening, brief intervention and referral to treatment;
  • Psychological, neurobehavioral and neuropsychological testing;
  • Residential and outpatient withdrawal management;
  • Mental health targeted case management;
  • Mental health rehabilitation services;
  • Psychiatric diagnostic evaluation;
  • Peer specialist services;
  • Medication management;
  • Individual, family and group psychotherapy; and
  • Collaborative care model services.21

Unwinding of the Public Health Emergency (PHE)

In response to the COVID-19 pandemic in March 2020, the U.S. Department of Health and Human Services Secretary declared a public health emergency (PHE) which allowed individuals, new moms, children, and families to receive continuous Medicaid and CHIP coverage without the need to renew their Medicaid coverage.22 Prior to the PHE, eligibility documentation was required to be provided annually. The PHE from the COVID-19 pandemic extended coverage until March 31, 2023.23 Since then, each state has begun rechecking Medicaid eligibility for those who have been continuously enrolled during this time, a process referred to as unwinding.24

Before the PHE termination, HHSC testified that they would struggle to process the immense workload of the impending Medicaid and CHIP renewals as they dealt with high vacancies and high turnover rates for eligibility employees.25 During the 88th regular session, the legislature allocated $31,098,585 in general revenue (GR) and $61,253,821 in federal funds in fiscal year (FY) 2024 and $6,794,845 in GR and $14,178,839 in federal funds in FY 25 for temporary full-time employees (FTEs) to support the anticipated increased workload for the unwinding of continuous Medicaid coverage.26 The funding resulted in an almost 19 percent decrease in eligibility advisor vacancy rates, more than 1,000 eligibility workers, more than 400 2-1-1 call center staff, increased wages for eligibility workers, and 642 temporary positions.

The unwinding process was a massive undertaking for Texas, HHSC was required to complete this process for more than 5.9 million Texans by May 2024.27 Between April 1, 2023 and April 10, 2024, HHSC initiated renewals for approximately 5.85 million Texans, or 99 percent of the Medicaid population. This process resulted in 2,102,396 Texas residents disenrolled from Medicaid, of which 64.8 percent are children without disabilities.28

A small number (9.9 percent) of Texans were able to be renewed during the unwinding process through the recommended ex parte process. Ex parte refers to a process in which publicly available data, such as state wage databases or information from SNAP documents, are used to determine someone’s eligibility status for Medicaid.29,30,31,32 Unfortunately, many people reported being unaware about the unwinding process or its impact on their insurance coverage.33 The majority, or 65 percent, of Texans lost their Medicaid coverage during the unwinding process due to procedural denials, such as failing to return the completed paperwork in time or not receiving the paperwork at all due to address changes.34 The other 34 percent were denied because they were determined ineligible due to Medicaid eligibility criteria.35

Why This Matters to Mental Health and Substance Use Consumers

Symptoms of mental health concerns and deaths due to substance overdose have steadily increased in the three years since the COVID-19 pandemic’s onset.36 In response to this increasing trend, many states, including Texas, expanded access to behavioral telehealth for Medicaid enrollees.37 Behavioral telehealth remains one of the most highly utilized Medicaid services in the country.38 Further, Medicaid is the largest payer of mental health and substance use care in the nation.39

Texans with mental health or substance use conditions who may lose coverage during this unwinding–erroneously or correctly–will lose out on life-saving care. This care gap widens when considering individuals with moderate to severe mental health concerns.40,41 Considering these statistics, the Medicaid unwinding and the resulting loss of coverage for thousands of Texans may have a strong impact on mental health care access.

Coverage Expansion

After the passage of the Affordable Care Act (ACA) in 2010, states received the option to expand Medicaid coverage to nearly all adults with yearly incomes up to 138 percent of the Federal Poverty Level (FPL).42 When opting into ACA Medicaid expansion, the federal government finances up to 90 percent of the cost, with the state supplementing the remaining 10 percent.43 Without opting into expansion, states retain the right to determine eligibility criteria for Medicaid.44 As of October 2024, 41 states (including D.C.) have adopted Medicaid expansion. The ten non-expansion states are Alabama, Florida, Georgia, Kansas, Mississippi, South Carolina, Tennessee, Texas, Wisconsin, and Wyoming.45,46

Texas remains the state with the highest rate of uninsured adults and children in the nation.47 At 16.6 percent of adults and almost 11 percent of children, Texans of all ages are more than two times as likely to be uninsured than the national average.48 If Texas were to opt into Medicaid expansion, approximately 1.4 million uninsured adults would be eligible for coverage.49 Many adults with mental health and/or substance use conditions often do not qualify for Medicaid in Texas, as they must have a severe mental health diagnosis and must not be eligible to work in order to qualify for disability status on Medicaid.50 Further, due to eligibility limitations, a sole diagnosis of a substance use disorder (even when meeting financial eligibility requirements) does not qualify an individual for Medicaid coverage.

Medicaid expansion in other states has been shown to improve behavioral health outcomes. In states with Medicaid expansion, people with behavioral health conditions are more likely to seek regular treatment and are less likely to skip medication due to financial barriers.51 Expanding Medicaid in Texas could provide life-saving services to countless people struggling with mental health or substance use conditions. Approximately 29 percent of individuals receiving health insurance coverage through the Medicaid expansion have a mental health and or/substance use condition.52 These examples from nearby states suggest that Medicaid expansion has a direct impact on not only addressing the uninsured rate, but also on improving individuals’ mental health and well-being:

  • Kentucky – Uninsured rates across the state have fallen from 17 percent in 2013 to 7 percent in 2021. During this time, the use of substance use treatment services covered by Medicaid increased fivefold.53,54
  • Arkansas – Uninsured rates across the state have fallen from 19 percent in 2013 to 11 percent in 2021. Medicaid expansion significantly reduced the uninsured rates of adults with depression, and reduced delays in seeking care and medications because of their cost.55,56
  • Louisiana – Uninsured rates across the state have fallen from 19 percent in 2013 to 9 percent in 2021. As of December 2023, over 270,000 individuals have been able to access specialized inpatient and outpatient mental health services, and almost 150,000 individuals have been able to receive specialized substance use outpatient, inpatient, and MAT services as a result of Medicaid expansion.57,58

Cost Savings

Increasing access to Medicaid coverage does not necessarily imply an increase in costs to the state. National research has found that there were no significant increases in spending from state funds as a result of Medicaid expansion.59 In addition to the enhanced FMAP, expansion states have seen direct savings, as well as offsetting of costs in other areas. Some of these savings related to behavioral health include:

  • Through Medicaid expansion, states have seen decreased uncompensated care in hospitals, reduced health care spending for individuals in the criminal justice system, and decreased state funding in public clinics and mental health facilities.60,61,62
  • In Medicaid expansion states, the share of substance use or mental health disorder hospitalizations involving patients without insurance fell from about 20 percent to about 5 percent.63
  • Multiple studies found an association between expansion and increases in Medicaid coverage of specialty substance use treatment facilities or programs, also showing associated decreases in the probability that individuals were uninsured at these facilities.64

References

  1. Medicaid. (2023). November 2023 Medicaid & CHIP enrollment data highlights. U.S. Centers for Medicare & Medicaid. https://www.medicaid.gov/medicaid/program-information/medicaid-and-chip-enrollment-data/report-highlights/index.html ↩︎
  2. Texas Health and Human Services Commission. (2023). Healthcare statistics. https://www.hhs.texas.gov/about/records-statistics/data-statistics/healthcare-statistics ↩︎
  3. Medicaid. (2023). Behavioral health services. U.S. Centers for Medicare & Medicaid. https://www.medicaid.gov/medicaid/benefits/behavioral-health-services/index.html ↩︎
  4. Guth, M., Saunders, H., Corallo, B., & Moreno, S. (2023). Medicaid coverage of behavioral health services in 2022: Findings from a survey of state Medicaid programs. Kaiser Family Foundation. https://www.kff.org/mental-health/issue-brief/medicaid-coverage-of-behavioral-health-services-in-2022-findings-from-a-survey-of-state-medicaid-programs/ ↩︎
  5. Texas Health and Human Services Commission. (2022). Texas Medicaid and CHIP reference guide (14th ed.). https://www.hhs.texas.gov/sites/default/files/documents/texas-medicaid-chip-reference-guide-14th-edition.pdf   ↩︎
  6. Reamer, A. (2018). Counting for dollars 2020: The role of the decennial census in the geographical distribution of federal funds. The University of George Washington: GW Institute of Public Policy. https://gwipp.gwu.edu/counting-dollars-2020-initial-analysis ↩︎
  7. Texas Health and Human Services Commission. (2022). Texas Medicaid and CHIP reference guide (14th ed.). https://www.hhs.texas.gov/sites/default/files/documents/texas-medicaid-chip-reference-guide-14th-edition.pdf   ↩︎
  8. Health Insurance Marketplace. (2024). Federal poverty level (FPL). https://www.healthcare.gov/glossary/federal-poverty-level-fpl/ ↩︎
  9. Ibid.   ↩︎
  10. Benefits. (n.d.). Texas Medicaid. U.S. Government. https://www.benefits.gov/benefit/1640 ↩︎
  11. Texas Health and Human Services Commission. (2022). Texas Medicaid and CHIP reference guide (14th ed.). https://www.hhs.texas.gov/sites/default/files/documents/texas-medicaid-chip-reference-guide-14th-edition.pdf   ↩︎
  12. Ibid. ↩︎
  13. Texas Health and Human Services. (n.d.). Children’s Medicaid and CHIP.  https://www.hhs.texas.gov/services/health/medicaid-chip/medicaid-chip-programs-services/programs-children-families/childrens-medicaid-chip ↩︎
  14. Ibid.  ↩︎
  15. Ibid. ↩︎
  16. Ibid. ↩︎
  17. Ibid. ↩︎
  18. Texas Health and Human Services Commission. (2022). Texas Medicaid and CHIP reference guide (14th ed.). https://www.hhs.texas.gov/sites/default/files/documents/texas-medicaid-chip-reference-guide-14th-edition.pdf   ↩︎
  19. Ibid. ↩︎
  20. Ibid. ↩︎
  21. Ibid. ↩︎
  22. Medcaid. (2022). Coronavirus Disease 2019 (COVID-19). U.S. Centers for Medicare and Medicaid Services.  https://www.medicaid.gov/resources-for-states/coronavirus-disease-2019-covid-19/index.html ↩︎
  23. Texas Health and Human Services Commission. (2023.). End of continuous Medicaid coverage FAQ. https://www.hhs.texas.gov/sites/default/files/documents/end-continuous-medicaid-coverage-faqs.pdf ↩︎
  24. Ibid.   ↩︎
  25. Salter, W. (2022, October 3). Presentation to the House Select Health Care Reform Committee [PowerPoint]. Texas Health and Human Services. https://www.hhs.texas.gov/sites/default/files/documents/presentation-health-care-reform-oct-2022.pdf  ↩︎
  26. Texas Legislature Online (2023). H.B. 1, General Appropriations Act, 88th Legislature, FY 2024-25. https://capitol.texas.gov/tlodocs/88R/billtext/pdf/HB00001F.pdf#navpanes=0 ↩︎
  27. Texas Health and Human Services. (2023, March). Ending continuous Medicaid coverage. [PowerPoint].  ↩︎
  28. Texas Health and Human Services. (2024). End of continuous Medicaid coverage dashboard, April 2024. https://www.hhs.texas.gov/sites/default/files/documents/april-2024-end-continuous-medical-dashboard.pdf ↩︎
  29. Corallo, B. & Tolbert, J. (2023). Understanding Medicaid ex parte renewals during the Unwinding. Kaiser Family Foundation. https://www.kff.org/policy-watch/understanding-medicaid-ex-parte-renewals-during-the-unwinding/#:~:text=Ex%20parte%20can%20also%20help,and%20return%20a%20renewal%20form.  ↩︎
  30. Ibid. ↩︎
  31. Ibid. ↩︎
  32. Ibid. ↩︎
  33. Klibanoff, E. (2023, July 17). 500,000 Texans have lost Medicaid coverage since April. The Texas Tribune. https://www.texastribune.org/2023/07/17/medicaid-texas-removed/  ↩︎
  34. Ibid. ↩︎
  35. Ibid. ↩︎
  36. Panchal, N., Saunders, H., Rudowitz, R., & Cox, C. (2023). The implications of COVID-19 for mental health and substance use. Kaiser Family Foundation. https://www.kff.org/health-reform/issue-brief/the-implications-of-covid-19-for-mental-health-and-substance-use/   ↩︎
  37. Guth, M. (2023). Telehealth delivery of behavioral health care in Medicaid: Findings from a survey of state Medicaid programs. Kaiser Family Foundation. https://www.kff.org/medicaid/issue-brief/telehealth-delivery-of-behavioral-health-care-in-medicaid-findings-from-a-survey-of-state-medicaid-programs/   ↩︎
  38. Ibid. ↩︎
  39. Medicaid. (2023). Behavioral health services. Centers for Medicare & Medicaid. https://www.medicaid.gov/medicaid/benefits/behavioral-health-services/index.html ↩︎
  40. Ibid.  ↩︎
  41. Saunders, H. & Rudowitz, R. (2022). Demographics and health insurance coverage of nonelderly adults with mental illness and substance use disorders in 2020. Kaiser Family Foundation. https://www.kff.org/mental-health/issue-brief/demographics-and-health-insurance-coverage-of-nonelderly-adults-with-mental-illness-and-substance-use-disorders-in-2020/   ↩︎
  42. U.S. Department of Health & Human Services. (2022). Medicaid expansion & what it means for you. U.S. Centers for Medicare and Medicaid. https://www.healthcare.gov/medicaid-chip/medicaid-expansion-and-you/ ↩︎
  43. Kaiser Family Foundation. (n.d.). Who could Medicaid reach with expansion in Texas? Retrieved November 22, 2022, from https://files.kff.org/attachment/fact-sheet-medicaid-expansion-TX ↩︎
  44. U.S. Department of Health & Human Services. (2022). Medicaid Expansion and what it means for you. U.S. Centers for Medicare and Medicaid. https://www.healthcare.gov/medicaid-chip/medicaid-expansion-and-you/ ↩︎
  45. Ibid. ↩︎
  46. Kaiser Family Foundation. (2024). Status of Medicaid expansion decision. [Dataset]. https://www.kff.org/affordable-care-act/state-indicator/state-activity-around-expanding-medicaid-under-the-affordable-care-act/?currentTimeframe=0&sortModel=%7B%22colId%22:%22Location%22,%22sort%22:%22asc%22%7D ↩︎
  47. Conway, D. & Branch, B. (2023). Health insurance coverage status and type by geography: 2021 and 2022. U.S. Census Bureau. https://www.census.gov/content/dam/Census/library/publications/2023/acs/acsbr-015.pdf ↩︎
  48. Ibid. ↩︎
  49. Kaiser Family Foundation. (n.d.). Who could Medicaid reach with expansion in Texas? Retrieved November 22, 2022, from https://files.kff.org/attachment/fact-sheet-medicaid-expansion-TX ↩︎
  50. Dunkelberg, A. (2022). Mental health another reason to expand Medicaid. Every Texan. https://everytexan.org/2022/10/28/mental-health-another-reason-to-expand-medicaid/ ↩︎
  51. National Alliance on Mental Illness. (n.d.). Medicaid expansion. Retrieved November 22, 2022, from https://www.nami.org/Advocacy/Policy-Priorities/Improving-Health/Medicaid-Expansion ↩︎
  52. Farley, R. (2017). Americans with mental health and substance abuse disorders: Single largest beneficiaries of the Medicaid expansion. National Council for Behavioral Health. https://www.thenationalcouncil.org/wp-content/uploads/2017/04/Medicaid-Expansion-Behavioral-Health-UPDATED-5-1-17.pdf?daf=375ateTbd56 ↩︎
  53. Kaiser Family Foundation. (2023). Medicaid in Kentucky. http://files.kff.org/attachment/fact-sheet-medicaid-state-KY ↩︎
  54. Cross-Call, J. (2018, January 16). Assessing Kentucky’s pre-waiver Medicaid expansion success. Center for Budget Priorities. https://www.cbpp.org/blog/assessing-kentuckys-pre-waiver-medicaid-expansion-success ↩︎
  55. Kaiser Family Foundation. (2023). Medicaid in Arkansas. https://files.kff.org/attachment/fact-sheet-medicaid-state-AR ↩︎
  56. Fry, C. E., & Sommers, B. D. (2018). Effect of Medicaid expansion on health insurance coverage and access to care among adults with depression. Psychiatric services (Washington, D.C.), 69(11), 1146–1152. https://doi.org/10.1176/appi.ps.201800181 ↩︎
  57. Kaiser Family Foundation. (2023). Medicaid in Louisiana. http://files.kff.org/attachment/fact-sheet-medicaid-state-LA ↩︎
  58. Louisiana Department of Health. (2023). Healthy Louisiana: LDH Medicaid expansion dashboard as of December 04, 2023. https://ldh.la.gov/HealthyLaDashboard/ ↩︎
  59. Guth, M., Garfield, R., & Rudowistz, R. (2020). The effects of Medicaid expansion under the ACA: Updates findings from a literature review. Kaiser Family Foundation. https://www.kff.org/report-section/the-effects-of-medicaid-expansion-under-the-aca-updated-findings-from-a-literature-review-report/ ↩︎
  60. Buchmueller TC, Cliff BQ, Levy H. The Benefits of Medicaid Expansion. JAMA Health Forum. 2020;1(7):e200879. doi:10.1001/jamahealthforum.2020.0879 ↩︎
  61. Levy, H., Ayanian, J. Z., Buchmueller, T. C., Grimes, D. R., & Ehrlich, G. (2020). Macroeconomic feedback effects of Medicaid expansion: Evidence from Michigan. Journal of Health Politics Policy and Law, 45(1), 5-48. doi: 10.1215/03616878-7893555 ↩︎
  62. https://www.nber.org/system/files/working_papers/w26862/w26862.pdf ↩︎
  63. Office of The Assistant Secretary for Planning and Evaluation. (2017). Continuing progress on the opioid epidemic: The Role of the Affordable Care Act, HHS ASPE issue brief. U.S. Department of Health & Human Services. https://aspe.hhs.gov/system/files/pdf/255456/ACAOpioid.pdf ↩︎
  64. Ibid. ↩︎

Updated on December 16th, 2024



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