TX Pulse Report August 2026

• What LPPFs fund: The dollars relieve the Texas state budget of financing supplemental and direct payments that help provide care for Medicaid and uninsured patients.
• What to watch: H.R. 1, the One Big Beautiful Bill Act (OBBBA), imposed a moratorium on new LPPFs/provider taxes and barred states from increasing existing ones. Texas has not expanded Medicaid, so its existing hospital LPPFs stay frozen near the current 6% level rather than being phased down, but the freeze halts the creation of new LPPFs and any rate increases.
• Why it matters:
  • LPPFs allow local communities to preserve hospital funding and Medicaid access, making them central to how Texas finances care for low-income and uninsured patients. 
  • LPPFs and provider taxes are increasingly under attack by certain special interests at the state and federal levels. There is often a misperception about their role. Even with all sources of supplemental payments, providers in Texas are still undercompensated for services provided by roughly $9 billion to cost.
  • HCA Healthcare is the largest provider of Medicaid services in the state of Texas.

State Leaders Issue FY2028-29 Budget Guidance: Gov. Greg Abbott (R), Lt. Gov. Dan Patrick (R) and House Speaker Dustin Burrows (R) have provided guidance to state agencies and public institutions of higher education to prepare the Legislative Appropriations Requests for the FY2028-29 biennium.

• 3% reduction: State agencies have been instructed to reduce their base spending requests by 3% and demonstrate responsible stewardship of taxpayer resources.
• Medicaid and CHIP: Medicaid and the Children’s Health Insurance Program (CHIP) are exempt from the reduction to maintain the benefits and eligibility required by state law. The guidance also calls for baseline requests to address projected caseload growth for these programs.
• Protected education funding: The guidance exempts the Foundation School Program and the Texas Education Savings Account Program from the requested reductions.
• Affordability priorities: State leaders said the next budget should continue addressing cost-of-living pressures, property tax relief and strategic investments that support Texas’ growth.
• Next steps: These requests will provide the starting point for budget development when the 90th Texas Legislature convenes in 2027. The FY2028-29 biennium starts in September 2027.

Don Huffines Appointed as Texas Comptroller: Don Huffines (R) has been appointed Texas Comptroller of Public Accounts, the state’s chief financial officer, following the resignation of acting Comptroller Kelly Hancock (R).

• Leadership change: Kelly Hancock (R) announced July 1 that he would resign as acting Comptroller effective July 31, with Huffines assuming the office the following day.
• Appointed by the Governor: Gov. Greg Abbott (R) appointed Huffines, who won the Republican nomination for Comptroller earlier this year, to fill the position. Huffines (R) will appear on the Nov. 3 general election ballot against State Senator Sarah Eckhardt (D).
• Background: Huffines (R) is a former State Senator and Dallas-area businessman who now serves as the state’s chief financial officer heading into the fall election.
• Why it matters: The Comptroller certifies the revenue available for the state budget and certifies the budget passed by the Legislature, making the office central to the FY2028-29 budget process.

HHSC Announces Leadership Appointments: The Texas Health and Human Services Commission has named new leaders for its Chief Counsel Division and Texas Medicaid and CHIP Services.

• New chief counsel: Nycia Deal will become HHSC Chief Counsel effective Sept. 1. She currently serves as Chief Deputy Counsel and leads the agency’s Legal Services Division.
• Medicaid leadership: Stephanie Stephens will serve as chief of Medicaid and CHIP Services, also known as the state Medicaid Director, effective Aug. 15.
• Experienced leadership: Stephens previously served as state Medicaid Director from 2020 to 2023 and has held several policy and leadership positions at HHSC.
• Why this matters: HCA Healthcare is the largest provider of Medicaid services in Texas.

General Election Reminder: Texas’ general election will be held Tuesday, Nov. 3. Colleagues are encouraged to check their voter registration and make any needed updates well before the fall deadlines.

• Last day to register: Monday, Oct. 5.
• Early voting: Monday, Oct. 19, through Friday, Oct. 30.
• Vote-by-mail application deadline: Friday, Oct. 23. Applications must be received, not simply postmarked.
• Take action: Check your voter registration status and find voting information through VoteTexas.gov.

Here’s What Else We’re Reading:

The Texas Tribune: Trial lawyers, once a force for Democrats, reclaim political clout in Texas GOP’s MAGA wing

The Texas Tribune: Texas’ ACA enrollment shrinks by 4% after tax credit expiration, new federal data shows

Fort Worth Star-Telegram: Gov. Abbott suggests lowering health insurance costs by nixing state mandates

News from HCA Healthcare