According to the Legislative Budget Board (LBB), HB 26 would have no significant fiscal implications for the state. The legislation requires the Health and Human Services Commission (HHSC) to allow Medicaid managed care organizations (MCOs) to offer nutrition counseling and instruction services in lieu of other specified Medicaid plan services. While this entails operational updates—particularly in claims processing and provider enrollment systems—HHSC has stated that these adjustments could be managed within existing resources and would not require additional appropriations.

Furthermore, the bill's directive to consider usage and costs of substituted services during capitation rate setting is a procedural change that does not, on its face, generate new or expanded financial obligations for the state. The voluntary nature of the service substitution, combined with requirements for medical appropriateness and cost-effectiveness, likely mitigates any potential fiscal risk. The substitution model may even lead to cost savings over time, though this is not explicitly estimated in the fiscal note.

At the local level, the bill is also not expected to impose significant fiscal impacts on units of local government. Because the Medicaid program is federally and state-funded and administered through state-level contracts with MCOs, the bill’s changes do not alter funding flows or responsibilities at the local level.

HB 26 proposes a limited but meaningful policy change to Texas Medicaid, allowing managed care organizations (MCOs) to offer nutrition counseling and instruction services in lieu of certain existing covered services. While the bill includes guardrails such as medical appropriateness, cost-effectiveness, and advisory committee oversight, it represents a notable departure from Medicaid’s traditional focus on clinical, medically necessary treatment. Though the change is optional for both providers and recipients and entails no significant fiscal impact, it signals a shift in Medicaid’s functional purpose—one that could expand over time.

The core concern with this bill is its potential to serve as a gateway to entitlement expansion. Even though home-delivered meals, food prescriptions, and grocery support are currently excluded, HB 26 lays a policy foundation that could later justify broader inclusion of non-medical, lifestyle-based services. This trend risks transforming Medicaid from a narrowly tailored health safety net into a broader wellness or nutrition platform, which could undermine fiscal discipline and blur the boundaries of public responsibility in healthcare. Once this precedent is established, future legislation could build on it, eroding the distinction between medically necessary care and lifestyle support.

Opposition to this bill aligns with a philosophy of limited government and program integrity. Medicaid should be focused on delivering essential, evidence-based medical treatment, not on facilitating wellness programming that could be better served by private or community initiatives. While preventive care is important, expanding Medicaid’s scope to encompass non-clinical services through in-lieu-of mechanisms risks mission creep and taxpayer overreach. For these reasons, Texas Policy Research recommends that lawmakers vote NO on HB 26.

• Individual Liberty: On one hand, HB 26 supports individual liberty by giving Medicaid recipients more choices in the services they can receive. The "in-lieu-of services" model is entirely voluntary: MCOs may offer the services, and patients may choose to use or decline them. This respects personal autonomy in navigating one's own healthcare decisions. However, some may view this as indirectly eroding liberty over time. By expanding Medicaid’s role into non-clinical, lifestyle-focused services, it could lead to greater government involvement in personal behavior and health management decisions—areas that should ideally be left to individuals and families, not state agencies.
• Personal Responsibility: Supporters may argue that by encouraging nutrition counseling, the bill promotes proactive self-care and healthier lifestyles, which aligns with the value of taking responsibility for one’s health. Yet critics might argue it sends the opposite message: that the government, via Medicaid, is responsible for managing lifestyle habits such as diet and nutrition. This could be seen as shifting responsibility from the individual to the state, particularly if the scope of services expands in the future.
• Free Enterprise: The bill gives Medicaid MCOs more flexibility to innovate in how they serve enrollees. It creates opportunities for private nutritionists, dietitians, and wellness providers to participate in the Medicaid marketplace, assuming they meet existing licensing and contracting requirements. However, by limiting the types of nutritional services (excluding food prescriptions and grocery support), it also places statutory restrictions on what businesses may offer, rather than letting MCOs tailor care based on outcomes.
• Private Property Rights: The bill has no direct implications for private property rights. It neither affects land use, business ownership, nor eminent domain issues.
• Limited Government: This is where the bill raises the strongest liberty principle objections. While the bill does not increase taxes or expand eligibility, it broadens the functional role of Medicaid, inching it further into the domain of non-medical social services. Even with exclusions built in, it creates a precedent that may be expanded later—pushing Medicaid beyond its original intent. This contradicts the principle of limited government by expanding what government programs are expected to do.

• SB 3001 (Same As)