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March 31, 2010 (512) 463-0300

HEALTHCARE REFORM EFFECTS ON TEXAS UNCLEAR

(AUSTIN)—The sweeping federal health care reform recently signed into law will have major effects in Texas, but the scope of those effects are unclear, according to testimony offered before a Senate panel Wednesday. Members of the Senate's Health and Human Services and State Affairs Committees heard from the heads of the Health and Human Services Commission and Department of Insurance about the impact that federal health care legislation could have in Texas. "There's a lot of things we know, there's a lot of things we know we don't know, and there's a lot that we don't know we don't know," said HHS Commissioner Tom Suehs. "We'll have to pursue those through the months as we work on the implementation of health care reform."

The federal bill implements a number of reforms within the next six months, which will affect mostly those who already have health insurance. Under the new law, insurance companies cannot put limits on lifetime benefits, nor can they rescind benefits on policy holders. Parents can keep their children on their own insurance plan until the age of 26, and children with preexisting conditions cannot be denied coverage. More reforms kick in in 2014, primarily aimed at the uninsured. That's when individuals will be required to have health insurance, or face a penalty. That year is also when the health insurance exchange will open, intended to be a one stop shopping site where consumers and small businesses can compare and purchase health insurance policies. Texas, along with other states, must demonstrate to the federal government by the beginning of 2013 that it has a plan to implement this exchange.

Suehs was clear that with such a complex piece of legislation, being implemented over a period of five years, the exact cost impact is impossible to determine at this early date. He pointed out that mandatory increases in Medicare and Medicaid insurance reimbursement rates will increase the state's cost of healthcare. One area for possible cost savings, he said, was the federal program to allow states to form pilot and demonstration programs relating to outcome-based compensation, mental health care, and long-term home care for the chronically ill.

Suehs stressed that the Legislature will have many difficult policy issues to consider in upcoming sessions. Lawmakers will have to decide whether to extend higher reimbursement rates to doctors for patients on the Children's Health Insurance Program after increased federal match rates end in 2013. They will have to consider how to manage changes to uncompensated care payments, as by 2014 the majority of Texans will have health insurance, and whether to extend HMO coverage into areas like South Texas, where HMO plans are currently prohibited.

Texas Insurance Commissioner Mike Geesling testified that his agency will face numerous challenges in meeting new federal health insurance guidelines. The Texas Department of Insurance will have to embark on one of the most significant consumer education programs in history, he said, to teach Texans how to navigate the new health insurance marketplace. His agency will reach out to all stakeholders and state agencies that will be affected by the new legislation, and will likely require new employees, technology and training to meet its goals.

State Affairs Committee Chairman Robert Duncan of Lubbock said the committees will hold another joint meeting later in the year to consider on-going changes to the federal legislation, as well as take public input on the impact of health care reform in Texas.

Session video and all other webcast recordings can be accessed from the Senate website's Audio/Video Archive.

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