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Medicaid and the State Children’s Health Insurance Program in Texas:Appendix B. Local Participation in Health CoverageThe Texas Constitution requires counties to participate in the provision and financing of publichealth care for the indigent. Prior to 1985, however, Texas law contained no specific provisionsregarding the definition of indigency or the extent of the health care services to be provided. 1By 1983, ambiguous state statutes regarding county responsibility had led to disparate taxburdens and service provisions. This prompted the governor, lieutenant governor, and housespeaker to convene the Task Force on Indigent Health Care to study medical indigency inTexas. The task force was charged with examining a potential indigent program in terms ofscope of services, eligibility criteria, administrative structure and method of finance.The task force’s findings were presented in the Task Force on Indigent Health Care Final Reportin December 1984. The general findings that the lack of uniformity in the definition of indigencyacross counties, the disproportionate provision of services statewide, and the subsequent lackof equitable financial burden, among others, led the task force to recommend expandedcoverage and enhanced service provision, a uniform definition of eligibility, and greater equity ofburden. 2The task force findings and recommendations led to the Indigent Health Care and TreatmentAct of 1985 (Chapter 61 of the Texas Health and Safety Code), which specifies that a countywould meet its health care responsibility for indigent residents in one of three ways: 1) bycreating a hospital district, 2) by running a public hospital, or 3) by operating a county indigenthealth care program (CIHCP).Hospital districts are special taxing districts created for the sole purpose of providing health careto people who reside within their boundaries. They are created through state legislativeamendment or through county voter approval. The maximum state allowed tax rate is 75 centsper $100 of property valuation. Public hospitals are hospitals owned, operated, or leased by acounty or municipality, other than a hospital district, with geographical service districts for whichthey have a legal obligation to provide health care services. Unlike hospital districts, local taxsupport for hospitals is not always dedicated. A CIHCP is the third mechanism for a county tomeet its indigent care obligation; it includes the provision of health care for some or all(dependent on presence of public hospital/hospital district) of the county’s indigent residents.Hospital districts and public hospitals are legally responsible for care to indigent individuals in aset service area. The service area may cover the entire county or cover only part of a county.A county not fully served by a hospital district or a public hospital, or served by neither, mustestablish a CIHCP. The act created a list of required basic health care services for countieswith CIHCPs. 3There are 142 counties with CIHCPs, 131 hospital districts, and 23 public hospitals. Thesenumbers do not total to the exact number of Texas counties as some counties are covered bymore than one type of indigent care entity and some types cover more than one county. 4For CICHPs, the Indigent Care Act defined “indigent” in terms of income and assets, originally17 percent of the FPL; however, hospital districts and public hospitals were originally givencomplete freedom to self-determine eligibility standards and services provided. This led someto provide expansive services and others to provide very limited or no services. This “freedom”was restricted in 1999 with HB 1398 (described below) which required both hospital districts andpublic hospitals, at a minimum, to provide care to individuals with incomes below 17 percent ofB-48