Rising health care costs are squeezing county budgets, and most county officials point to the counties indigent health care program (CIHCP) or the Indigent Health Care and Treatment Act of 1985, as an unfunded mandate that forces counties to spend a large portion of their budgets on this state requirement. Consequently, this article will attempt to briefly explain the very complex subject of indigent health.

In the Beginning:

Let’s start at the beginning! In the beginning God made Texas. Ok, OK, not really, but you know what I mean. After Texas declared its independence, one of the first laws enacted was to obligate counties to provide, at their own expense, support of the indigent, lame, and blind persons, who are unable to support themselves. In 1876, the statute was amended to provide for the "support of paupers," which the courts have interpreted to include medical care. This was the counties general obligation or a general rule of law that languished until 1985.

In 1985 after two years of lengthy legislative studies and work group meetings, made up of representatives from county governments, hospital districts, hospitals, state agencies, private associations and advocacy groups, a proposal, The Indigent Health Care Act of 1985, to reform the indigent health care system was passed.

Current System:

This brings us to the current system. The Indigent Health Care Act of 1985, established counties and all public hospitals as the payer of last resort and statutorily set out specific duties and responsibilities. The mostly unfunded state mandate provided for county liability for indigent health care to be capped at 10 percent (subsequently changed to 8 percent), and for the state to reimburse counties for a portion of their costs. The act also established an indigent health care fund administered by the Texas Department of Health (TDH), which is used to reimburse counties for a portion of their indigent health costs over the 8 percent threshold.

In greater detail, the income eligibility level was revised in 2001, to 21 percent of federal poverty level, or $163 per month for an individual, with some restrictions on asset values similar to those in the state cash assistance program. Furthermore, each fiscal year a county is liable for $30,000 per county resident or 30 days of hospitalization or nursing-home care, whichever comes first. After the 8 percent threshold is reached the county must notify the state, and the state reimburses counties for 90 percent of the cost above that threshold. A common misconception among county officials is that the state requires counties to spend a total 8 percent of their general revenue tax levy on indigent care, which is not the case.

In addition, participating counties must pay the entire cost up front, then wait for the state to reimburse the remaining 90 percent, which is not guaranteed given that TDH has inadequate funding. Therefore, TDH has limited disbursements to any one county to 35 percent of the total fund. This has caused counties like Atascosa, DeWitt, Eastland, and San Patricio to simply close their CIHCP programs once the 8 percent threshold has been reached.

Where Do We Go From Here?

Now that you have a basic understanding of the current system, I will list some of the possible solutions being floated around Austin.

One proposed solution is to create a "Regional Robin Hood" plan for indigent health. The system, based on the 12 TDH health regions, would group regional health centers and outlining health care facilities into regions of basic service. Counties that exhaust less than their statutorily set limit of 8 percent would send in the unspent remainder to the region to be reallocated to the counties that have exceeded that limit in an attempt to help offset uncompensated care. Proponents argue this would ensure equal commitment from counties to those counties that are being squeezed by the uninsured population seeking emergency services outside their county and rising health care cost. While opponents argue the state has never been good at redistributing monies, counties are not currently and should not be required to spend the full 8 percent, and the school finance "Robin Hood" plan was considered unconstitutional why will this plan be any different.

Another proposed solution is to expand the state Medicaid program to include county indigent recipients. Some counties say this could standardize the services and eligibility across the state and make federal matching funds available. While opponents say expanding the Medicaid program to include once excluded members of the population could create an enormous expense for the state.

Lifting the unfunded mandate altogether is another option. County officials under the Indigent Health Care Act view it as an unfunded mandate. Supporters of lifting the unfunded mandate say that if the state wants indigent care for Texans, the state should shoulder the entire cost. Again opponents declare this could create an enormous expense for the state.

All in all no matter which solution is chosen, the 1985 system was established according to the older medical model which was based on patients visiting doctors and hospitals when they were really sick, instead of on today's medical model which focuses more on preventive treatment to catch illnesses earlier and more cheaply. Furthermore, the structure of the 1985 law and the County Indigent Health Care Program (CIHCP) does not encourage local and state players to work as partners. Rather, the word "mandate" appears to more accurately describe our relationship in this area.