For the 2018-19 biennium, Article II received $33.5 billion in GRR appropriations and $43.8 billion in federal funding; total All-Funds appropriations were $78.9 billion, including about $1.6 billion in other revenue from interagency contracts, rebates and other payments. The state’s Health and Human Services Commission, which administers Medicaid in Texas, received the largest share of both GRR appropriations ($28.7 billion or 86 percent) and federal funds ($40.9 billion or 93 percent) for the 2018-19 biennium.
Medicaid is the costliest Article II program by far, receiving $61.8 billion in All Funds for the biennium, or 78 percent of the total.
From fiscal 1996 through 2019, both GRR and All-Funds appropriations for Article II more than tripled, rising at an average annual growth rate of 5.2 percent (Exhibit 7). The rise reflects both the growth and the aging of the Texas population, the rising cost of prescription drugs and the prevalence of chronic disease such as diabetes, cancer and Alzheimer’s disease.
|Fiscal Year||General Revenue-Related Funds Index||All Funds Index||Medical Cost Index||Personal Income Index|
Sources: Bureau of Labor Statistics, IHS Markit, Legislative Budget Board and Texas Comptroller of Public Accounts
Note, however, that appropriations rose more slowly than either the medical cost index (5.9 percent annually) or personal income (5.5 percent annually). This indicates that Texas’ Medicaid program may be comparatively cost-efficient due to relatively tight eligibility requirements, low reimbursement rates and the state’s increased use of managed-care service models.