Texas News


Date ArticleType
2/3/2017 Press Release
Texas Association of Business: Medicaid Managed Care Is A Win-Win For Taxpayers and Texans on Medicaid

Texas Association of Business: Medicaid Managed Care Is A Win-Win For Taxpayers and Texans on Medicaid

TAB Urges Legislature to Allow for Managed Care Health Plans to Fully Manage Medicaid Rx Benefit


AUSTIN—Pointing to significant taxpayer savings and more efficient care, the Texas Association of Business (TAB) today urged the Texas Legislature to allow for the transition of the Medicaid prescription drug benefit to private health plan management to occur as scheduled. As the Senate Finance Workgroup on Health Care Costs meets today to look for cost savings, this could mean significant savings to the state.

“Employers and citizens of Texas deserve to have the best access to health care throughout our state and to that end, TAB has long supported the successful transition of Texas Medicaid from the former fee-for-service model to the managed care approach,” said TAB Governmental Affairs Manager Amanda Martin. “That approach has not only saved taxpayers billions of dollars but also dramatically improved outcomes for Texas on Medicaid.

At a time when health care costs are rising across the board and forcing Texas employers to make tough decisions, the Legislature would be wise to continue the transition to Medicaid managed care and allow health plans to fully manage the Medicaid prescription drug benefit,” Martin said. “Texas health plans have demonstrated they have the time-tested tools and private market leverage to achieve significant savings while improving care, and their management of the drug benefit is sure to yield similar results.”

TAB supports allowing managed care organizations (MCOs) to use their own formularies and their own prior authorization for prescription drug coverage as part of the continued transition to Medicaid managed care from the former fee-for-service payment model.

New analysis by the Health and Human Services Commission finds that allowing MCOs to fully manage the prescription drug benefit in Medicaid will result in roughly $40 million in state general revenue savings and $100 million in all funds savings for Texas taxpayers annually.



Because of the managed care model’s successful track record in improving patient outcomes while also achieving significant savings, in 2011 the Texas Legislature adopted the full expansion of managed care statewide. This included the integration of the prescription drug benefit through a step-process, with the final step scheduled for August of 2018. Some would like to delay this transition, but TAB feels it should continue because of the ongoing benefit to patients and cost savings that will be realized by the state.