Capitol Chronicle

A couple of weeks ago, I noted that in response to the state's looming deficit, the Health and Human Services Commission -- apparently with the encouragement of Gov. Rick Perry -- has found a likely target for cutting its expenditures: the Children's Health Insurance Program, or C.H.I.P. (see "Capitol Chronicle: Blame It On the Kids," Feb. 1,austinchronicle.com/issues/dispatch/2002-02-01/pols_capitol.html). The amount of money allocated for C.H.I.P. is about 1% of the state's biennial budget of $114 billion, and more than two-thirds of that money comes from the federal government. Over 20% of Texans -- about 4.6 million people, including several hundred thousand children -- have no health insurance. Yet the governor reportedly believes that a sensible way of balancing the budget is to make it more difficult for children to be insured.

It's not surprising that a Republican governor should take a dim view of children's health insurance. It was Perry's predecessor, George W. Bush, who unsuccessfully fought expansion of the C.H.I.P. program in the 1999 Legislature, even as he was campaigning for president with a promise to "leave no child behind." But it is surprising that this approach to cost-cutting has garnered bipartisan support. Former Comptroller John Sharp, the Democratic candidate for lieutenant governor, has proposed finding some of the $5 billion needed to balance the state's next budget in the children's Medicaid program, which benefits families even worse off economically than the kids enrolled in C.H.I.P.

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Whose Mistake?

Sharp recently garnered the endorsement of the Texas Association of Business and Chambers of Commerce. The TABCC is not famous for being terribly friendly to Democrats, and indeed, of those candidates endorsed by the association for the fall campaign, Sharp was the sole Democrat. It undoubtedly helped that his GOP opponent is Land Commissioner David Dewhurst, whose qualifications for public office must be indiscernible even to the eagle-eyed, rock-ribbed conservatives of the TABCC. But what also caught the association's eye was Sharp's description of the 2001 Legislature's decision to make it easier for people to apply and remain eligible for Medicaid as "a mistake." That's surprising, coming from a major Democratic candidate -- since Medicaid simplification (including an easier application process and a longer enrollment period) was in fact the centerpiece of the Democratic legislative program last year.

Specifically, Sharp said he objected to expanding the Medicaid enrollment period from six months to a year, to match the more convenient C.H.I.P. enrollment period. He says that moving it back to six months could save $1 billion or more toward the $5 billion shortfall. Precisely how is a matter of some dispute.

Sharp failed to note that any money saved would be at the health risk of the most vulnerable people in the state, while most of the cost would be shifted to local hospital district taxpayers (or, in our own case, city of Austin taxpayers) who would go on paying more, in money and resources, for the emergency care of people who would be better and more cheaply served by Medicaid.

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Sharp's Pencil

Sharp now says the whole matter is a misunderstanding. He told me that by more closely monitoring when people cycle off eligibility (e.g., by getting a new or better-paying job), the state would save money without risking the health coverage of anyone who truly needs it. Sharp believes his proposal would mean even more money for health care, because regularly sweeping the undeserving from the rolls would make more funds available for the deserving (although how the state could do that and simultaneously recoup the money for the deficit, remains unclear). "The reporters [covering the TABCC] got it wrong," said Sharp. "They said I agreed with Dewhurst -- but he was talking about kicking all these supposed deadbeats off the rolls, and using even a three-month enrollment period. I didn't agree with that, and I think what I proposed will mean more money getting to those who still need insurance, not those who no longer need it." Sharp also insisted that he supports the rest of Medicaid simplification.

It seems curious that so few of Sharp's fellow Democrats are able to see his view that making it more difficult for families to stay on Medicaid -- rationing by inconvenience -- would in fact be better for the health of the state's children. Houston Rep. Garnet Coleman, among the leaders in the fight for Medicaid simplification last year, greeted Sharp's reversal with dismay. "That's exactly the wrong direction to be going in," said Coleman. "There are about 500,000 Texas children eligible for Medicaid but not enrolled," he said, "and even should they become ineligible for Medicaid, they have to reach 200% of the poverty level before they're ineligible for C.H.I.P. The whole point of simplification was to treat the poorest families the same way you treat the less poor.

"I have a long-term respect for John Sharp," Coleman concluded. "But we disagree on this."

Sharp blamed the Capitol reporters for misrepresenting his position. But TABCC Executive Director Bill Hammond seems to be suffering from the same delusion. Hammond said the group's endorsement was less a criticism of Dewhurst than support for Sharp's more specific recommendations for cutting the state budget. I asked him if that included Sharp's proposal to move one-year eligibility for Medicaid back to six months. "Yes, it did have a significant effect on the endorsement. We're very concerned about the budget," Hammond said, "and Sharp presented a compelling argument with regard to reviewing Medicaid enrollment every six months instead of once a year."

Perhaps the prosperous, well-insured gentlemen of the TABCC found themselves happily faced with a question likely to bring somewhat less joy to ordinary Texans as they enter the voting booth in November: With Democrats like these, who needs Republicans?