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U.S. Supreme Court Tells Texas to Improve Medicaid for Children

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Jan. 15--AUSTIN, Texas -- Texas can be forced to honor an agreement to improve health and dental care for about 1.6 million children under Medicaid, the U.S. Supreme Court ruled unanimously Wednesday.

The financial impact on state government wasn't immediately clear, but it could be millions of dollars, one legislator said.

The decision apparently won't stall the state's budget-tightening campaign to continue dropping thousands of children from public health programs at a time when Texas leads the nation in the percentage of residents without health insurance. One in four Texans lacks health coverage.

But the ruling could lead to improved services for children who already qualify for Medicaid, lawyers for the plaintiffs said.

Susan F. Zinn of San Antonio, an attorney for families who filed the original lawsuit 11 years ago, said she hoped Texas Medicaid officials "will finally start working with us again to improve their programs and to follow the consent decree and federal law."

"Over the years, Texas officials have dedicated themselves to building a system that meets federal requirements and serves the needs of children covered by the Medicaid program," said Kristie Zamrazil, spokeswoman for the Health and Human Services Commission.

"Substantial efforts and resources have been committed to the Texas Health Steps program, and we look forward to working with all interested parties to demonstrate the program's effectiveness."

A spokesman for the governor's office did not respond to requests for comment.

The Supreme Court upheld U.S. District Judge William Wayne Justice's order, issued in 2000, that the state make wide-ranging improvements in Medicaid services for children to comply with a consent decree, or agreement, the state had made in 1996. The state had appealed the order, issued during then-Gov. George W. Bush's presidential race.

"Federal courts are not reduced to approving consent decrees and hoping for compliance," Justice Anthony M. Kennedy wrote for the high court. "Once entered, a consent decree may be enforced."

The case dates back to 1993, when several families sued the state during the administration of Democratic Gov. Ann Richards, alleging the state had failed to provide their children adequate preventive care and other services that Medicaid, the government health care program for the poor, required.

The class-action suit was settled in 1996 by a consent decree, or agreement between the state and the plaintiffs, approved by a federal court after Bush had become governor. Two years later, however, the plaintiffs returned to court to complain that Texas was failing to live up to its agreement to provide the Medicaid services required by federal law.

In a strongly worded ruling in August 2000, Justice agreed. Among other things, Justice criticized Texas' failure to provide medical and dental checkups to many eligible children -- and adults, as well -- and the state's efforts to inform Medicaid recipients of available services.

Justice said Texas' Medicaid program for children was "badly flawed" and found that the state had violated several sections of the consent decree.

The 5th U.S. Circuit Court of Appeals upheld the state's appeal in July 2002, holding that the state's 11th Amendment sovereign immunity against being sued barred the federal district court from enforcing the consent decree.

But the Supreme Court ruled that sovereign immunity didn't prevent enforcement of the agreement.

Kennedy wrote that the consent decree "reflects a choice among various ways that a state could implement the Medicaid Act. As a result, enforcing the decree vindicates an agreement that the state officials reached to comply with federal law."

The lawsuit named state officials as defendants, not the state itself. Nineteen other states, which either have been or are currently bound by consent decrees in various federal lawsuits of their own, unsuccessfully backed Texas' position.

Zinn applauded the high court's decision.

"Everyone should have to follow federal court orders, including state officials -- and especially when the officials asked the court to enter the order in the first place," Zinn said.

Zinn and another plaintiffs' lawyer, Jane Swanson of The Woodlands, said Medicaid care for Texas children has gotten worse since Justice entered his order in 2000.

A smaller proportion of children are getting medical checkups through the Medicaid program, and the documented immunization rate in the Medicaid managed care program has dropped, they said.

State Rep. Garnet Coleman, D-Houston, a strong advocate for children's health care, said he didn't know how much compliance with the court order would cost state government but estimated the price tag "could be upwards of $40 (million) to $50 million."

Coleman said the state may have to increase reimbursement rates for doctors and dentists providing Medicaid services to ensure that recipients receive adequate checkups, immunizations and other services.

In any event, he added, the state should have enough money, including federal funds, to comply. The federal government pays for 60 percent of Medicaid costs.

Anne Dunkelberg, a Medicaid analyst for the Center for Public Policy Priorities, an advocacy group for middle- and low-income people, said the Supreme Court decision means the state will have to meet federal requirements for Medicaid services and make improvements where necessary.

Dunkelberg said the ruling wouldn't force the state to sign up new children for health care or stop Texas officials from carrying out new policies restricting eligibility in both the Medicaid and the Children's Health Insurance Program.

The Legislature last year, to help bridge a $10 billion revenue shortfall without raising state taxes, imposed new restrictions designed to keep children's Medicaid enrollment at the current level of 1.6 million. Without the changes, another 330,000 Texas children would have been added to the Medicaid rolls by mid-2005, Dunkelberg said.

Gov. Rick Perry and lawmakers also clamped down on the Children's Health Insurance Program, which serves children whose family income is too high to qualify for Medicaid but too low to afford private health insurance.

Almost 100,000 children have been dropped from CHIP since May, reducing that program's enrollment to 416,000 for January. Enrollment reductions are projected to total 169,000 by mid-2005, thanks to budget cuts and new, more restrictive enrollment policies.

The Associated Press contributed to this story.


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