Judge halts Texas Health and Human Services’ Medicaid reorganization, protecting health coverage for 1.5 million residents
Dallas, Texas – District Judge Laurie Eiserloh ruled in an important decision halting Texas Health and Human Services’ attempts to reorganize its Medicaid and CHIP programs, therefore preventing the state from mandating about 1.5 million residents to change their health insurance coverage. Many low-income households who could have lost access to reliable healthcare professionals find great relief in the decision.
The injunction especially forbids the state from proceeding with new contracts excluding three important hospital-managed health plans—Cook Children’s Health Plan, Driscoll Health Plan, and Texas Children’s Health Plan—from its network. Historically serving a great number of families in southern Texas and the Houston area, these plans offer necessary Medicaid STAR and CHIP coverage mostly for children.
The state’s proposal included a $116 billion Medicaid contract change meant to remove these plans from the network by September 2025, therefore forcing participants to find new providers. The judge’s decision highlighted the possible confusion and damage a such a large change could cause on underprivileged groups.
Judge Eiserloh underlined in her 10-page order the negative effects the suggested alterations would have on member continuity of treatment. “The intended contract awards will impose significant harm and confusion on millions of Texas’ STAR & CHIP members,” she wrote.
Reacting to the court’s decision, a spokesperson from Cook Children’s Health Care System expressed gratitude and relief. This is the announcement in full:
Cook Children’s Health Plan (CCHP) is grateful to announce that a Travis County court has granted a Temporary Injunction, preventing the Texas Health and Human Services Commission (HHSC) from awarding, signing or implementing any new contracts for the Medicaid STAR and CHIP managed care programs. This decision is a major win for the 125,000 children and families who rely on CCHP for their health care coverage.
For more than two decades, CCHP has been a trusted provider of high-quality health care coverage to low-income families, expectant mothers, and children with complex medical needs. We believe this ruling will help ensure that our Members continue to have access to the care they need, when they need it.
We would like to express our gratitude to the court for their careful consideration of this matter and for their decision in our favor. Cook Children’s will continue to monitor the situation closely and work with all stakeholders to ensure that our Members continue to receive the best possible care.
The controversy started when Cook Children’s Health Plan sued the head of the Texas Health and Human Services Commission four months ago claiming that the procedure for the new Medicaid contract awards was defective. The health plan claimed that via early distribution of copies of competitor proposals, the state government gave another provider, Aetna, a “unfair advantage”.
Although the temporary ban keeps Medicaid and CHIP programs in Texas’ immediate future stable, the final result will be decided in a trial set for November 3, 2025. The state can, however, change its proposal in the interim or appeal the ruling.
The case has highlighted the difficulties of providing healthcare coverage via managed care organizations, which comprise several health insurers and hospital system health plans acquired by the state. The present decision emphasizes the continuous difficulties in striking a balance in state-run health facilities between accessibility and cost-efficiency of quality of treatment.
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Affected families and healthcare professionals are intently observing the state’s next actions as the issue unfolds, hoping for a solution that preserves affordable healthcare choices for low-income Texas residents.
