This month: Poorest Patients’ Medical Bills fall to Texas Counties
Partnering for Impact
Property, sales taxes help to pay for low-income residents’ health care
Local Government Assistance
Region 2 – Frank Alvarez
Frank Alvarez is the Comptroller’s representative for the 24 counties in far West Texas and the Trans-Pecos stretching from Scurry County to El Paso County.
He serves as the project leader for the Comptroller’s Control Self Assessments Program and Best Practices project for local governments. Frank has worked in public relations and television in Dallas and a nonprofit, a chamber of commerce and the State Bar of Texas in Austin.
More than 20 Texas local governments and organizations already have had their best practices featured on the Comptroller’s Texas Ahead Web site. Their successes are highlighted in a broad range of local government responsibilities, including purchasing, court fine collections, budgeting and open government.
If you have a best practice that should be featured, e-mail Frank and brag on your organization.
Frank and the other local government specialists can offer technical assistance about programs that foster economic development including property tax abatements, appraised value limitations for school districts and the sales tax for economic development. They stay informed about relevant state and federal laws and can update cities, counties and special districts on important tax and other legislative changes.
Read more about Local Government Assistance, and check out a variety of economic development tools and resources.
In 1985, the Legislature mandated Texas counties to fund health care services for poor residents by passing the Indigent Health Care and Treatment Act (IHCTA).
Some counties fund health care expenditures from general revenue, others turn to alternative revenue streams, including hospital districts, county health services districts and the state assistance fund for indigent health care.
The IHCTA designates counties with the principal responsibility for providing basic – and ostensibly uniform – medical services to their indigent residents, who are defined as people with a family income of less than 21 percent of the poverty level. In 2008, a family of four qualified if its annual income was lower than $4,631. Prior to the adoption of IHCTA, health care services available to poor Texans varied county to county, while the costs were borne disproportionately by those counties that had public hospitals or other medical facilities.
Most Texas counties are eligible to create one or more hospital districts to facilitate health services for low-income residents. Currently, there are 140 hospital districts that collect property taxes and nine that impose sales tax.
Often it is not financially feasible for counties with populations of 50,000 or fewer residents to operate a county hospital. Instead, these primarily rural counties contract with other entities to provide medical services and fund the expenditures with a voter-approved county health services district sales tax up to 0.5 percent.
In Jim Hogg County, officials have found it particularly difficult to provide funding for indigent health care. According to County Judge Guadalupe Canales, the community has few medical providers and no hospitals to care for its almost 6,000 residents. This requires the county to contract with private companies and other governmental entities for all of its medical services. Much of the county’s medical services budget is spent transporting residents to other counties for urgent care. Canales says the county would not be able to fund indigent health costs without the health services district sales tax.
For counties with significantly higher than average costs for indigent health care, the state’s indigent health care fund provides reimbursements for any indigent patient’s health care expenditures that exceed $30,000 per fiscal year. Counties also can apply for reimbursement for 90 percent of all indigent health care expenditures incurred that exceed 8 percent of a county’s general tax levy. Eleven counties requested reimbursements from the indigent health care fund in fiscal 2008. TR
For more information about how Texas counties are dealing with indigent health care challenges, read the Texas in Focus regional reports. The seventh report, Alamo Region, was published in October 2009.
Steps to create a hospital district
- The commissioners’ court must call an election to establish the district and elect the initial board of directors.
- Voters in counties with populations of fewer than 800,000 must approve a maximum property tax rate not to exceed 75 cents per $100 valuation for hospital districts.
- Districts located in larger counties must set a property tax rate no higher than 25 cents per $100 valuation.
- Voters also can impose a hospital district sales and use tax as long as the combined local sales tax rate does not exceed 2 percent at any location within the district.
Find more information about economic development programs on Texas Ahead and tax information by downloading the Economic Development Sales Tax publication (PDF, 2.0MB).