Testimony Before the Texas Senate Health and Human Services Committee on Senate Bill 921 Requiring Confirmation of Medicaid Recipients’ Eligibility Before Benefits Renewal
Heartland Impact
March 11, 2025
Chairwoman Kolkhorst and Members of the Committee:
Thank you for holding a hearing on Senate Bill 921, legislation aimed at ensuring Medicaid is there for those who need it most.
My name is Samantha Vick, and I am the Senior State Government Relations Manager at Heartland Impact. Heartland Impact is the advocacy and outreach arm of The Heartland Institute. Both are independent, national, nonprofit organizations working to discover, develop, and promote free-market solutions to social and economic problems. Heartland specializes in providing state lawmakers the policy and advocacy resources to advance free-market policies towards broad-based economic prosperity.
I would like to thank Rep. Kevin Sparks for introducing this legislation that would prevent state Medicaid administrators from automatically renewing recipients without contacting them to make sure that they qualify for the program.
More than four million Texans are currently enrolled in Medicaid. Skyrocketing Medicaid costs threaten to devour all discretionary spending in the state. During the pandemic, Medicaid enrollment nationally ballooned by 23 million people, to 95 million, as eligibility requirements were relaxed the federal government gave states enhanced payments to load more people onto Medicaid and keep them there.
With the COVID-19 emergency long over, states must unwind the Medicaid expansion and transition nonqualifying enrollees back to private health insurance and taxpayer-supported exchanges. The federal government now allows states to resume disenrolling people who do not qualify. “Almost all” those who should be removed are eligible for state-supported exchanges, employer-sponsored health insurance, or Medicaid itself through redetermination, according to the Urban Institute. With Medicaid costs rising rapidly and hospitals scrambling to balance their books, Texas must transition those who no longer qualify for Medicaid to alternative health insurance options.
To provide care to those who truly need it and keep insurance premiums more affordable for businesses and families who pay for private health insurance, Texas must stop paying for people who do not qualify for Medicaid because they make too much money, live in another state, or are dead.
Senate Bill 921 would reform determinations to verify eligibility of Medicaid enrollees. In a state with more than four million people enrolled in Medicaid and total annual spending of more than $40 billion on the program, the Texas Attorney General’s
office estimated Medicaid fraud cost the state’s taxpayers $4 billion in 2023. The vast majority of wasted dollars go to insurance companies to pay for Medicaid policies for people who do not qualify.
In January 2023, more than 93 million Americans were enrolled in Medicaid. According to CMS data, $80.6 billion was improperly spent in 2022, and a staggering $98 billion in Medicaid spending in 2021, with the vast majority of these improper payments being attributed to lack of eligibility. Total improper payments decreased to an estimated $31.1 billion in 2024 as states began to cycle ineligible people off the program after the federal ban on disqualifications was lifted. Preventing the automatic renewal of recipients is an essential first step in the verification process.
Evidence from other states confirms establishing a robust eligibility verification system can significantly decrease Medicaid fraud and abuse. After the Illinois Department of Healthcare and Family Services launched the Illinois Medicaid Redetermination Project in 2012, the Prairie State removed 400,000 ineligible recipients and saved an estimated $350 million per year.
SB 921 would similarly help retrieve taxpayer money spent improperly in Texas. The legislation would establish that the state’s Health and Human Services Commission or any other “state agency that administers any part of Medicaid” “may not conduct an ex parte renewal of a recipient’s Medicaid Eligibility” unless “expressly required by federal law.” The bill defines “ex parte renewal” as “a redetermination of a recipient’s Medicaid eligibility that is conducted automatically without requiring information from the recipient using information from verifiable electronic data sources or that is otherwise available to the commission.”
Making contact with Medicaid enrollees just makes sense. States should find ways to communicate meaningfully with Medicaid recipients to help improve their overall care and determine their eligibility for scarce resources. It is unfair to give taxpayer money to people who do not qualify for it, as such payments divert resources from the truly needy and jeopardize the program’s fiscal viability, putting eligible recipients in danger of harsh future cuts to their physician access and medical treatment.
Medicaid recipients benefit from an effective eligibility determination process. Thankfully, Texas is driving this noble effort through legislation like Senate Bill 921.
Thank you for your time and consideration.
