H.B. No. 891 proposes significant reforms to the Medicaid program in Texas by establishing a block grant funding system and creating an alternative program to provide health benefit plan coverage for low-income individuals through private market solutions. The bill introduces Chapter 532A to the Government Code, detailing definitions, federal authorization requirements, and the establishment of a reformed state Medicaid program that operates under a risk-based managed care model. It mandates a sliding scale subsidy system to assist eligible individuals in purchasing health benefit plans and additional cost-sharing subsidies for various healthcare expenses. Furthermore, Chapter 545A is added to connect low-income residents with health benefit plan coverage, clarifying that this program does not create an entitlement to assistance and emphasizing the need for federal authorization for implementation.

The bill aims to create a cost-neutral health benefit program for individuals under 65 with household incomes at or below 133% of the federal poverty level, leveraging premium tax revenues and achieving cost savings to alleviate local tax burdens. It mandates the Health and Human Services Commission to develop a proposal for federal authorization, outlining minimum program requirements such as premium assistance for private health coverage and health savings accounts. Additionally, a Medicaid Reform Task Force is established to advise on the design of the state Medicaid program, with provisions for customized benefits packages, a parental fee program for families of children receiving long-term services, and housing assistance for certain recipients. The bill also requires studies on the estate recovery program and alternative income and asset limits for Medicaid eligibility, with findings due by December 1, 2026, and is set to take effect on September 1, 2025, pending necessary federal waivers or authorizations.

Statutes affected:
Introduced: Subtitle I, Title , Government Code 1.01, Subtitle I, Title , Government Code 2.01, Subchapter B, Chapter , Human Resources Code 3.02 (Subtitle I, Title , Government Code 2, Subchapter B, Chapter , Human Resources Code 3, Subtitle I, Title , Government Code 1)