The Texas economy would suffer significantly for each $1 cut in state spending on Medicaid and the State Children's Health Insurance Program, according to a report released by the state hospital and medical associations in advance of legislative debate on correcting a projected state budget shortfall of $9.9 billion through August 2005. State revenue during the next two-year budget cycle is projected to be $54.1 billion. Legislators are considering reducing provider rates by 5%, limiting SCHIP enrollment to children from families at up to 150% of the poverty level instead of 200%, and dropping some categories of Medicaid eligibility, according to the Texas Hospital Association. According to the report, for every $1 reduction in state spending, Texas would lose 47 cents in tax revenue, $2.81 in federal matching funds and $19.14 in business activity. In addition, health insurance premiums would increase $1.34 and taxpayers would see their local taxes rise 51 cents, according to the report, produced by the Perryman Group, Waco, Texas. -- by Mary Chris Jaklevic
Texas providers say cuts would hurt more than help
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