August 1, 2014 8:10 AM

Greenfield: As women's clinics close, state Medicaid costs will increase

"This increased number of births will result in Medicaid expenditures increasing by around $250 million a year after HB 2 is fully implemented."

A recent study from the Texas Policy Evaluation Project (TPEP) at the University of Texas reported that passage of House Bill 2 (HB2) by the Texas Legislature in 2013 resulted in reducing abortions by 9,200. While some women may find out-of-state sites to have an abortion, we should expect additional births in Texas. These additional births will have an impact on state finances.

As shown in Chart #1, more than 55 percent of the births in the state in 2010 were paid for by Medicaid. In fiscal year 2010, the Medicaid program spent $2.6 billion to cover the delivery of 221,000 babies, at an average cost of $11,600, each.

By projecting the proportion of births that will be covered by Medicaid and the increase in delivery costs, one can derive an estimate of the impact HB 2 has and will have on state finances. Should the current trend continue, the proportion of births in the state covered by Medicaid will be around 60 percent in 2014. Average cost per Medicaid beneficiary increased by 5.4 percent per year between 2004 and 2010. Had this rate of increase continued, the average cost per Medicaid covered birth in 2014 would be around $14,000 per beneficiary.

The rest of column can be found in today's R&D Department

By Stuart Greenfield, Ph.D.