| Vote Recommendation | Economic Freedom | Property Rights | Personal Responsibility | Limited Government | Individual Liberty |
|---|---|---|---|---|---|
| No | Negative | Neutral | Neutral | Negative | Neutral |
No significant fiscal implication to the State is anticipated.
SB 1585 would require the executive commissioner of the
Health and Human Services (HHS), the Office of the Comptroller of Public
Accounts of the State of Texas, and the Department of Aging and Disability
Services (DADS) to conduct a joint feasibility study of developing a prepaid
investment plan to help citizens cover the cost of residential care programs.
The study of this prepaid residential care program would have
to model the prepaid higher education tuition program, also known as the Texas Tomorrow
Trust Fund (TTF). Additionally, this study would have to evaluate alternative programs.
Finally, this study must be submitted to the governor and
the legislature by no later than November 1, 2016.
While we are normally
neutral on studies, SB 1585 is egregious enough to qualify as an exception
because of the underlining effects that would result. Although this bill does
not itself expand Medicaid it would inevitably lead to the development of a program
that would bind the state to provide long term residential and home care
services.
Prior to Medicaid’s
passage in 1965, the private market for long term care insurance was growing.
However, people soon realized that they would not have to provide their own private
insurance because Medicaid would shoulder the costs for this service. In short,
Medicaid’s growth in providing this service greatly hurt any private options
for long term care insurance.
However, beginning in
the mid 90’s the private market for long term insurance had a comeback that has
continued to this day. Unfortunately, this bill would most likely suppress this
latter market resurgence because the study would focus on the feasibility of
implementing and expanding a government administered prepaid investment plan
for similar services for yet another segment of the population.
To that point, the issue
we have with modeling this prepaid investment plan after the TTF is that the
TTF has proven to be financially unsound. In fact, this program has risked insolvency because of underfunded liabilities attributed to higher
tuition costs. TTF has had to undergo many iterations to shore up stability
within its unstable framework. We are puzzled that SB 1585 would investigate
the TTF model as a viable option for funding long term residential care.
The author’s statement
of intent argues that even though Medicaid is the largest payer of residential
care services, “individuals still have to contribute an average of $715 per
month, which is almost all of their income.” However, this argument neglects
the fact that Medicaid covers everything medically necessary for an individual
excluding incidentals. In addition, Texas already has a generous eligibility
requirement for long-term care at 300% of SSI or about 225% FPL. The long-term
care benefit received far exceeds the amount collected in annuity payments minus
the personal needs allowance. Currently, Medicaid in fiscal year 2012 covered
64.1 percent of nursing home residents.
SB 1585 is the means to
an end, and that end is increasing HHS spending by providing a prepaid
investment plan for residential care coverage. In the current fiscal year, more
money will be spent in Health and Human Services (HHS) than all of the money
spent for state education programs including all public education and higher
education combined. Instead of looking for ways to expand the bloated
bureaucracy in the HHS, this legislation should be looking at ways to encourage
the private market to alleviate the HHS of its already overextended obligations
in providing other health services.
For these reasons, we
oppose SB 1585 because it violates our limited government principle and
personal responsibility principle.