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Medicaid serves the poor, elderly and people with disabilities and is financed by both state and federal dollars. In fiscal 1998, the match was 62 percent federal funds and 38 percent state. Federal and state governments spent about $9.9 billion in Texas that year.

The state Medicaid office, at the Health and Human Services Commission, writes the state Medicaid plan outlining what services Texas will provide and oversees Medicaid programs administered by the Texas Department of Health, the Texas Department of Human Services, the Texas Department of Mental Health and Mental Retardation, and other agencies.