Mon, 16 August 21

Medicaid Monday: 56 Years of Medicaid

August 16, 2021

By: Alicia Pierce, Jamie Dudensing

In the summer of 1965, President and Texan Lyndon Johnson signed the law that would put Medicaid into effect. Fifty-six years later, Medicaid is an essential program for the health of many Americans. In Texas, Medicaid connects more than 4 million Texans with the greatest medical needs to health care and coverage.

This includes:

  • about half of the births in the state
  • 1 in 3 Texans with disabilities
  • 1 in 4 Medicare recipients with long-term needs not covered by Medicare
  • 50,000 veterans

In over half a century of Medicaid, one of the best developments was a shift from the fee-for-service model to a managed care system. Rather than pay for services in an isolated way, which incentivizes frequency of treatment rather than results, managed care brings together all aspects of care to produce better results at a lower cost.

The approach of managed care in Texas works. Millions of Texans, including children and pregnant moms, have seen improved outcomes, and Texas taxpayers have saved over $5 billion since 2009. Managed care has reduced the rate of drug cost growth by half, bringing the rate down to three times lower than the national average. The focus on prevention, wellness, and care coordination has translated into better care and lower costs.

Managed care works just like private health insurance. Every month, Texas pays the Medicaid health plan a health care premium for each person they cover. Medicaid health plans use that premium to cover medical expenses, coordinate complex medical care, and help Texans with Medicaid coverage stay as healthy and active as possible.

Under a managed care model, 90% of every Medicaid dollar goes directly to patient care. That focus shows up in customer satisfaction.

  • Nearly 9 in 10 (86%) Texas Medicaid recipients say they are satisfied with their Medicaid health care services.
  • More than 80% say it is easy to get prescriptions they need using their Medicaid benefits.
  • 8 in 10 (80%) say it is easy for them to find a primary care provider.

To learn more about how managed care can create a brighter future for Medicaid in the next fifty years, visit TAHP’s Medicaid policy page.

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