Written by Aisha Ainsworth

On Jan. 12, the 87th Texas Legislature will descend on the Pink Dome in Austin, and the gavel will fall to mark the opening of the new 140-day legislative session. How session will play out thereafter is still a bit unclear. Certainly, we can expect lengthy debates over the next two-year budget. There will be partisan disagreements that garner too much media attention, and unsuspecting lawmakers will reach across the aisle to make Texas an even better place for us all. Some things won’t change. And in times like these, those conventions ground us, freeing up energy to be nimbler and more rhythmic through the uncertainty.

The effects of the COVID-19 pandemic are wide-ranging and profound. People and their businesses are hurting. From the books to the frontlines, Texas hospitals have been tested and stretched every step of the way. At a time when health care services are needed most, hospitals have been forced to furlough nurses and other frontline staff to keep their doors open.

Texas’ economy was strong before the pandemic hit, but it too is suffering. The state’s unemployment rate remains more than double what it was in January. Sales tax revenues—the state’s single largest funding source—were down 6.1% in September compared to the same time last year. Thanks to the pandemic and the recent hit to the oil and gas market, the state’s current two-year budget is about $11.5 billion short of the original projection. This leaves state lawmakers with an estimated $4.58 billion deficit, the largest in state history.

The biennial budget is the one bill lawmakers must pass. Crafting the budget is rarely an easy process. And pandemic-related uncertainty and the increased need for aid will make lawmakers’ jobs incredibly difficult this session.

The Effect of the COVID-19 Pandemic

At the time of this writing, the Texas Capitol is closed to the public due to the pandemic. It’s unclear when it will reopen or how things will work when it does. From lawmakers to their staffers to advocates to visitors and the media, the Texas Capitol bustles with people every session. Attendees of committee hearings spill out of the hearing rooms and into the halls. There are barbecues buffets on the Capitol’s lawn, and the 150-member body of the Texas House of Representatives shares desks that are physically conjoined to cast their floor votes. In this session, the standard operating procedure is far from “safe” amid the ongoing pandemic.

Plexiglass dividers have been installed in committee hearing rooms. Other protocols are still being decided. Among them are visitor restrictions, office staff limitations and occurrences like in-person meetings and public recognitions. It’s also possible that lawmakers will be asked to limit their priorities. This could help to keep the number of committee hearings down too.

Carrie Kroll
Kroll

Whatever the changes may be, the Texas Hospital Association will be critical to achieving Texas hospitals’ policy goals. “We’re eager to learn about the new protocols, but we’re also not waiting to engage lawmakers,” Carrie Kroll, vice president of advocacy, public health and quality. “We have been in constant communication with leadership and other key offices throughout the pandemic, and we’ll continue to educate lawmakers about hospital priorities during session and any in special sessions that may follow.”

Following the regular session, lawmakers are expected to reconvene for at least a 30-day special session to address redistricting. The 2020 Census data that lawmakers need to redraw the House and Senate district maps will likely not be available during session since the Census was delayed due to the pandemic. Only the governor can call a special session, and he dictates what issues lawmakers need to address during that time. If lawmakers are called back to Austin, he may put more than just redistricting on their plates.

Following the 2017 legislative session, Gov. Greg Abbott (R) called a special session for lawmakers to revisit legislation that didn’t pass in the regular session. The 20-item agenda included six issues affecting Texas hospitals, including efforts to limit hospital districts’ and other taxing entities’ ability to generate property tax revenue and restrictions on in-hospital Do-Not-Attempt-Resuscitation Orders. The potential for a special session is an added layer of uncertainty, and it remains to be seen how this will affect lawmakers’ political calculus.

Election Outcomes

Despite aggressive and expensive efforts by Democrats, the makeup of the Texas Legislature will remain largely unchanged. The Texas House of Representatives and Senate still maintain a solid Republican majority.

After picking up 12 House seats in the 2018 election, Democrats only needed nine additional seats to control the chamber. Many speculated that the COVID-19 pandemic and lack of access to affordable health care would play a vital role in these races. Ultimately, there was no change in the partisan makeup of the house. Incumbent and longtime health care advocate Rep. Sarah Davis (R-West University Place) lost to her Democratic challenger, Ann Johnson.

photo of the front gates of the Texas capitol grounds with the dome of the capitol in the background

One of the most significant changes the legislature will see in 2021 is with the new Speaker of the House. Following a successful 2019 session, current House Speaker Dennis Bonnen (R-Angleton) was all but forced to resign after a secret audio recording was leaked to the public. After it was evident the GOP would hold the house, Rep. Dade Phelan (R-Beaumont) locked up the pledges needed to win the gavel on the first day of session. The speaker, who sets the agenda and priorities and controls the flow of legislation in the House, also selects chairs for the lower chambers’ committees.

With the loss of one GOP seat, the Republican Senators also lost their supermajority. Rep. Roland Gutierrez (R-San Antonio) will take the seat held by GOP incumbent Sen. Pete Flores for Texas’ 19th Senate District. Without the supermajority, Republican Senators can no longer bring up bills out of order on the Senate floor.

The Health Care Coverage Debate

Politics play an important role in health care decisions in Texas. Sometimes sound health care policies are not politically palatable, affecting Texans’ health and wellness and hospitals’ ability to provide care. One significant health care debate that is likely this session will be over coverage—whether and how the state can increase the number of Texans with comprehensive health care coverage.

Before the pandemic, Texas had the largest population (5 million) and the highest rate (18%) of uninsured residents in the nation. Now with pandemic-induced unemployment, even more Texans are without employer-sponsored health care coverage. But lawmakers have good reason to pursue a comprehensive coverage solution for Texans. Aside from the apparent health and productivity benefits that health insurance affords, increasing health care coverage also makes financial sense. The legislature could bring billions of dollars to the state by expanding Medicaid eligibility.

A recent study estimates that roughly 1.2 million Texans would qualify if the Texas Legislature widened Medicaid eligibility to include low-income individuals who make 138% or less of the federal poverty level. The study, conducted by the Texas A&M University and the Episcopal Health Foundation, found that expanding Medicaid under the Affordable Care Act could bring $5.4 billion in federal funds to the state. Expansion under the ACA offers a 90-10 federal-state match. Based on the study’s estimates, the total cost to the state would be at least $540 million, which the state could cover with existing general revenue or an alternate approach that would yield a positive impact to the state budget—an impact the state’s legislators may decide they need.

Coverage expansion could help the state cut spending on services for individuals who could get all or some of their care through the new, expanded Medicaid program. The state could save on inpatient care for incarcerated individuals and community-based mental health and substance use services, among others. The state could also save on coverage for people who are already covered under Medicaid, such as pregnant women and women who need breast or cervical cancer treatment. Alternatively, the state could increase the tax revenue it generates from health insurance companies. All health insurers licensed by the Texas Department of Insurance must pay a 1.75% tax on the gross premiums they collect each year. If the state used the existing Medicaid managed care organizations to cover the expansion population's services, the Medicaid MCOs’ risk pool would increase, as would the state’s health insurance premium tax revenue.

Texas remains one of just 13 states that has opted not to increase access to coverage under the ACA. The reason is largely a political one that Texas hospitals are working to diffuse this session.

John Hawkins
Hawkins

“Increasing the number of insured Texans is a top priority for Texas hospitals,” said John Hawkins, THA’s senior vice president of government relations. “While we’d like to see expansion under the ACA, we recognize that isn’t the only path. The state can achieve a coverage solution and increase access to care through other means too.” Texas can pursue a waiver to allow the ACA expansion population to be covered through subsidy in the federal health insurance marketplace or through the existing state managed care network. The state could also seek a limited expansion of Medicaid benefits for targeted populations, such as postpartum mothers and/or individuals with serious mental illness.

Carrie Williams
Williams

“THA soon will launch a robust communications and public affairs campaign encouraging increased access to health care coverage,” said Carrie Williams, THA’s chief communications officer. “The campaign will be waged online, in the press and on the ground to influence public perception of Medicaid expansion and shape public opinion in a way that creates legislative opportunities. We’ll look to our member hospitals to help amplify this effort.”

Priorities to Ensure Access to Care

As Texas hospitals prepare for an uphill battle with coverage expansion, they also will have to compete with other pressing issues for attention and resources. The COVID-19 pandemic has helped illuminate some of the state’s health care needs, but the stakes for Texas hospitals still are high. Medicaid reimbursement continues to fall below the actual cost of providing hospital care. Many Texans struggle with unmet behavioral health needs. People of color and lower-income individuals continue to experience health care disparities.

Jennifer Banda
Banda

Protecting hospital payment rates and hospitals’ ability to finance the non-federal share of Medicaid supplemental payments is key this session. The dire budget outlook means funding for any issue could be reduced. State agencies have already been asked to cut this biennium’s expenditures by 5%. “We asked the state health agency to protect hospital payments from the cuts because they are critical to ensure hospitals’ ability to provide essential care services,” said Jennifer Banda, J.D., THA’s vice president of advocacy, public policy and political strategy. “We are pleased they listened, and we’re working hard to continue protecting the rates through the session.”

Sara Gonzalez
Gonzalez

THA also will advocate for funding to support Texas’ behavioral health system. According to Sara Gonzalez, THA’s vice president of advocacy and public policy, “Texas has made great progress in this space over the past few years. Increased and ongoing investment in the behavioral health system is needed to ensure Texans can access emergency inpatient and outpatient, community-based services when they need them,” explained Sara Gonzalez, THA’s vice president of advocacy and public policy.

COVID-19 has spurred unprecedented flexibilities related to telehealth and telemedicine, and hospitals hope they are here to stay. Telemedicine payment parity with in-person visits for commercial payors, the ability to establish a physician-patient relationship by phone only and other flexibilities may become permanent.

Hospitals have a big year ahead. In addition to vaccinating the public against COVID-19, hospitals will need to stay engaged and take action on the legislative activities at the Capitol. Being able to mobilize and influence lawmakers is critical to ensure the policies and funding needed to provide the best possible care to every Texan. To learn more about THA’s advocacy and Texas hospitals’ priorities, visit www.tha.org/state.