By: TAHP | Tuesday, September 15, 2026

Part of TAHP’s New Medicaid Series: A Record of Health, Savings, and Innovation

What’s new: TAHP is releasing the newest Texas Medicaid dollar, an accounting of where every dollar in the program is spent. It shows 91 cents of every Medicaid dollar going to direct patient care, while overhead costs remain slim.

Why it matters: Medicaid covers one in seven Texans and is funded by taxpayers through state and federal contributions. That money pays for a pregnant mom’s prenatal visits, a child’s asthma medication, dialysis three times a week, and the home health aide who lets an older Texan stay in her own home instead of a nursing facility.

What the 91 cents buys: The Medicaid dollar sorts every dollar the state spends through all 16 managed care health plans into five categories of care.

• Hospital and emergency care: 34.3 cents covers inpatient stays, outpatient procedures, and emergency room visits.
• Long-term care and support at home: 26.4 cents covers nursing facility care and the service coordination that helps older Texans and Texans with disabilities stay in their own homes.
• Doctor visits: 13.6 cents covers primary care physicians, specialists, and the professional services delivered in their offices.
• Prescription drugs: 9.7 cents covers the medications that keep a manageable condition from turning into a hospital stay.
• Dental, therapy, dialysis, and behavioral health: 7 cents covers other care that falls outside a regular doctor visit.

How Texas set it up this way: Texas pays health plans a set monthly premium for every person they cover, and the plans accept all the financial risk for delivering that care.

• The state caps what plans can spend on administration, caps what they can earn, and requires them to share savings back to taxpayers through experience rebates.
• Every dollar is reported to the state and published through detailed financial statistical reports (FSRs).

What that has meant for taxpayers: Health plans are paid to focus on prevention, wellness, care coordination, and medication adherence, which means getting someone to a doctor before a manageable condition turns into an emergency.

• Prevention and coordination save money by keeping people out of hospital beds and emergency rooms.
• Texas Medicaid per-person costs grew 14 percent from 2012 to 2022 while health care costs across the country grew 52 percent over the same period.

What’s next: Capitol staff can dig into how the program works at our Medicaid 101 Food for Thought lunch on October 6, RSVP here. We’ll also hear from the Texas HHSC Medicaid Director Stephanie Stephens at our conference November 2-4, register today.

The bottom line: Texas Medicaid is more than just health care. It is an investment in the future of Texas, and 91 cents of every dollar in it goes straight to the care that helps one in seven Texans get healthy, stay healthy, and live life to the fullest.