Texas Medicaid Reform Model: A Market-Based, Patient-Centered Approach

Texas Public Policy Foundation, September 2015

16 Pages Posted: 11 Oct 2015

See all articles by John Davidson

John Davidson

Texas Public Policy Foundation

Vance Ginn

Texas Public Policy Foundation

Date Written: September 24, 2015

Abstract

We find that the Texas Medicaid Reform Model would provide substantial cost savings through a federal block grant that allows Texas to shift some risk groups into a defined contribution program that subsidizes private health insurance premiums and includes an incentive to choose a high-deductible plan with a health savings account. This model would ask Texans to have some skin in the game, providing an incentive to deter overuse of healthcare while providing quality, cost-effective health care and superior access to providers compared to the status quo. Our results show that the annual cost savings to the Medicaid program under the reform model will be in the $6 billion range after ten years. The Texas Medicaid Reform Model provides an approach that would satisfy these concerns and improve the well-being of all Texans. It could also help other states seeking to adopt a similar approach, although further modeling would be required to estimate cost savings in states that adopt such reforms.

Keywords: Medicaid, Defined-Contribution Model, Texas

JEL Classification: H72, I11, I18

Suggested Citation

Davidson, John and Ginn, Vance, Texas Medicaid Reform Model: A Market-Based, Patient-Centered Approach (September 24, 2015). Texas Public Policy Foundation, September 2015. Available at SSRN: https://ssrn.com/abstract=2672111

John Davidson

Texas Public Policy Foundation ( email )

900 Congress Avenue
Suite 400
Austin, TX 78701
United States

Vance Ginn (Contact Author)

Texas Public Policy Foundation ( email )

901 Congress Avenue
Austin, TX 78701
United States
7134785255 (Phone)

HOME PAGE: http://www.texaspolicy.com/experts/detail/vance-ginn

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