If you have Medicaid in Texas, a big change could be coming to your health insurance [Fort Worth Star-Telegram]

Nine-year-old MJ Hernandez has been to a lot of doctor's appointments in his young life. He was born at just 27 weeks old, and spent the first six months of life in the neonatal intensive care unit.

He was diagnosed with hydrocephalus -- water in his brain, his mom explains -- and cerebral palsy, and later with chronic lung disease and autism. With his mom, Breanna Hernandez, he's been to doctors' offices and hospitals and different types of therapy across the Metroplex.

Throughout his life, much of MJ's care has been paid for by a Medicaid health insurance program for children and teenagers with disabilities or other special health needs.

But an unexpected change in state Medicaid administration could force MJ and thousands of kids like him in the Tarrant County area to switch their health insurance provider next year. Families, health providers, and Cook Children's Health Network -- the region's primary pediatric health system -- say it could cause chaos for kids like MJ and the health care workers who treat them.

The Texas Health and Human Services Commission, which operates these programs -- called STAR and CHIP -- shocked many pediatric providers in Tarrant County in March when it decided not to award Cook Children's two Medicaid contracts it has had for years. If the commission's original decision stands, more than 124,000 people who get their health insurance through Cook Children's will have to sign up for a new plan by Sept. 1, 2025. In addition to Cook Children's, the insurance company Wellpoint was also not awarded a contract.

Altogether, almost 80% of the 346,000 kids and families currently enrolled in those programs would have to pick a new insurance provider if the state's decision stands. Although these kids and families will still be eligible for Medicaid and CHIP health insurance, the process of switching which company provides that insurance -- say, from a Cook Children's insurance plan to one from Molina -- could cause a bureaucratic mess, critics of the state's decision said.

"It's going to cause a delay in services," said Brenna Kurz, administrator of A-Z Therapy in North Richland Hills.

She's seen this before.

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Over the last year, the state has been responsible for checking every single person on Medicaid to see if they are still eligible for the program in the wake of the pandemic. During the massive administrative task, the state removed more than 1 million children from Medicaid -- including some who were still eligible for the program -- leaving many without health insurance.

Kurz said that multiple clients of A-Z Therapy lost their Medicaid, and by extension, their access to expensive health care like therapy. It took weeks or even months before they could get back in the program and back to therapy.

"We had so many kids lose coverage just from that alone," Kurz said. "I don't think they have enough manpower to get these families the proper coverage again."

About 40% of A-Z Therapy's clients have health insurance through Cook Children's Health Plan and would have to pick a new health plan next year if the state's decision stands, Kurz said.

A press officer for HHSC defended the state's process for reviewing and selecting which companies get the contracts. Jennifer Ruffcorn wrote in an email that everyone who submitted a proposal for the contract was "scored using the same evaluation criteria."

Contracts were awarded to insurance providers that received the highest scores, Ruffcorn wrote.

"This will provide the best value to the state and quality of care and service to all STAR & CHIP members," she said.

Cook Children's has filed an appeal. If the decision is not reversed through the appeals process, the health plan will consider filing a lawsuit against the state, said Karen Love, the director of Cook Children's Health Plan.

How Medicaid works in Texas

The decision made by the state government, and the impact it could have on kids and doctors in Tarrant County, is the result of the state's complex system for administering Medicaid.

Medicaid is best known as the health insurance program for low-income children and adults. Although the majority of Medicaid funding comes from the federal government, state governments get to make many decisions about how Medicaid works locally. Texas, for example, is one of just 10 states that has limited the number of people who can qualify for Medicaid health insurance. In Texas, very few adults qualify for the program. The majority of Medicaid recipients are low-income children and pregnant or postpartum people.

In addition to deciding who can qualify for Medicaid, states also get to decide how they provide the health insurance itself. In Texas, almost all Medicaid insurance is provided by private companies hired by the state.

The state hires insurance providers -- known as managed care organizations -- and pays them a fixed monthly rate per Medicaid enrollee. The providers are responsible for reimbursing doctors, therapists, and others after someone gets healthcare. Medicaid contracts are among the largest awarded by state governments.

After existing contracts expire, Texas decides which organizations it will hire to provide insurance to Medicaid enrollees.

In March, the state's Health and Human Services Commission announced that it would not award two Medicaid contracts to Cook Children's and multiple other local health plans. Instead, the state said it planned to award the contracts to United Healthcare, Molina, Blue Cross and Blue Shield and Aetna for Tarrant County and five neighboring counties.

Cook Children's Health Plan scored 1,826 out of 2,000 total possible points.

Cook Children's is preparing its proposal for a third contract for STAR Kids, the program for children with disabilities that provides MJ his health insurance. Love, the director of Cook Children's Health Plan, said she is concerned that Cook Children's will again lose out on the contract because of the state's selection process.

Love and the executives of other health plans operated by local, nonprofit providers criticized the state's system for scoring proposals, arguing that the state did not give enough consideration to the community benefits provided by local, nonprofit entities like Cook Children's.

A big change looms for Medicaid enrollees in Fort Worth

In addition to Cook Children's Health Plan, the state passed over multiple other health plans that previously had Medicaid contracts in different regions of the state. If the state stands by its original decision, almost half -- 1.8 million Texans -- of the about 4 million people currently on Medicaid would have to choose a new insurer next year.

In the Tarrant region alone, more than three out of every four people on Medicaid would have to pick a new plan next year. About 33% of kids with Medicaid and CHIP in the Tarrant area receive health insurance through Cook Children's, and another 46% receive health insurance through Wellpoint. Both groups would need to switch plans next year under the state's current decision.

This doesn't necessarily mean that any kids or pregnant people are losing their Medicaid health insurance. Changing providers doesn't affect members' eligibility for Medicaid, Ruffcorn said in an email.

But local providers and families are worried some kids who need to change health plans will temporarily lose their health insurance. For kids like MJ, even a 30 day gap in health insurance coverage can be damaging.

During the Medicaid unwinding process, when the state was responsible for checking every single Medicaid recipient to ensure they qualified for the program, MJ was one of numerous kids who was wrongly removed from Medicaid, even though he still qualified for the service because of disabilities. His mom was able to get him re-enrolled in the essential program thanks to the help of Amber Castillo, a nurse and service coordinator with Cook Children's Health Plan.

"It was a matter of coordinating between myself, mom, and HHSC to try and get that application back to them," Castillo said.

MJ lost his Medicaid health insurance for about 30 days, Castillo said, meaning he had to go without needed care and supplies during that time.

"I'm very concerned about HHSC's ability to administratively transition 2 million pregnant women and children on one day in September 1, 2025," said Ken Janda, a professor of practice at the University of Houston's medical school. Janda was previously the executive director of Community Health Choice, a health plan similar to one run by Cook Children's,

HHSC noted that insurance providers are "contractually required" to limit disruptions to care for those on Medicaid. Ruffcorn, the HHSC press officer, wrote that the state agency expects the transition to a new insurance provider to be "as seamless as possible."

HHSC's decision is not yet final. An HHSC executive will respond to the protests filed by Cook Children's and other health plans. Health plans will get a second opportunity to appeal that decision as well, Love said.

After final contracts are awarded, HHSC will conduct a "robust readiness review" to make sure that insurance providers can fulfill the obligations outlined in their contract, Ruffcorn said.

The contract change would also be a massive economic shift for Cook Children's Health Network.

Medicaid contracts bring in billions of dollars for the insurance companies who are awarded them. For the current fiscal year, Cook Children's Health Plan expects to bring in about $845 million in premiums through its state contracts. Without the state contracts, the health plan would have no business. About 375 people are employed at the health plan. If the health plan is forced to close, Cook Children's "would do everything possible to keep these staff members employed through various roles in the health care system," Love said in an email.

The possible change would not threaten the larger Cook Children's Health Network. The health plan is a subsidiary of the children's hospital's larger system.

Waiting for a decision

On a recent Thursday, MJ sat atop a palomino pony, balancing with ease during his weekly horse therapy lesson. He waved his hands in front of him, talking to them, something his mom says he does when he's feeling particularly happy and at ease.

Places like All Star Equestrian near Burleson, where MJ has been taking lessons since he was 2, are part of the broader network of doctors, therapists, and other specialists that MJ and his mom have come to rely on to make sure he gets the care he needs.

But depending on how the state's Medicaid contracts shake out, and how much change it causes for the family, it might be one disruption too many. Hernandez, MJ's mom, said she's thought about leaving Texas if Cook Children's Health Plan dissolves and it's difficult for MJ to pick a new plan.

"At least I would know that the care that those states give might be better quality for my child," she said.

For now, MJ and his mom and thousands of other families like them, all they can do is wait as the contract process is finalized. They'll wait to see whether they'll have to switch insurance providers, and if those insurance providers can follow through on their obligation to provide uninterrupted care.

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