The Medicaid program, created in 1965 as part of President Lyndon Johnson’s Great Society, is jointly funded by the state and the federal government according to the federal medical assistance percentage (FMAP). Texas has a larger match than many states (57.13 percent federally funded), as the FMAP is based on per capita income in the state, which is relatively low. In 2015, Texas Medicaid cost the state $15 billion and the federal government $21 billion. Medicaid is administered by the Texas Health and Human Services Commission.


Medicaid provides acute health care services, including physician, inpatient, outpatient, pharmacy and lab services) and long-term services to eligible low-income, aged or disabled Texans. As of December 2016, total Medicaid enrollment was just under 4.1 million, more than 3 million of which were children (74 percent), 739,000 were elderly and disabled persons (19 percent), 137,000 were pregnant women and 148,000 were parents of dependents and other adults (together comprising 7 percent of enrollees). Children are eligible, according to age, at or below 138 – 206 percent of the federal poverty level (FPL), while pregnant women at or below 203 percent of the FPL and parents at 18 percent of the FPL may enroll. Most states offer some coverage to working age (18-64) adults historically or through the Affordable Care Act (ACA) Medicaid expansion which covers adults in this age group up to 138 percent of the FPL. Texas elected not to expand Medicaid.


Most of the program is operating through Medicaid Managed Care, which has been expanded to cover more than 80 percent of enrollees. Savings and improved outcomes are reported as a result of this expansion. The Medicaid 1115 Waiver [1] – originally awarded in 2011 -has helped expand managed care throughout the state and supports innovative and outcome-focused health care for uninsured and low-income populations.
Texas continues to struggle with low reimbursement rates under the program, which have been cited to be less than 60 percent of the care provided by participating providers. Provider shortages are therefore reported as a hindrance to access to care for enrollees.

[1] Review encyclopedic entry: Improvement program waiver (1115 waiver)