S.B. No. 289 proposes a significant overhaul of the Medicaid program in Texas by introducing a block grant funding system and establishing an alternative program to provide health benefit plan coverage for low-income individuals through private market solutions. The bill creates Chapter 532A in the Government Code, detailing definitions, federal authorization requirements, and the administration of the state Medicaid program under this new model. It mandates a risk-based Medicaid managed care model and allows for acute care benefits based on specific income thresholds and age criteria, while also providing sliding scale subsidies to assist individuals in purchasing health benefit plans.

Additionally, the bill introduces Chapter 545A, which ensures health benefit plan coverage through private market solutions without creating an entitlement to assistance. It requires the commission to negotiate with federal authorities for necessary waivers to access federal matching funds and outlines the need for rules to implement the program. The legislation establishes a Medicaid Reform Task Force to advise on the design of the state Medicaid program and health benefit coverage, with a report due by December 1, 2026. It also includes provisions for customized benefits packages, a parental fee program for long-term services, and housing assistance for certain recipients, with the bill set to take effect on September 1, 2025, pending federal 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 1, Subchapter B, Chapter , Human Resources Code 3, Subtitle I, Title , Government Code 2)