House Bill 497, passed by the 81st Texas Legislature, directs that the Texas Health and Human Services Commission (HHSC) and the Texas Department of Insurance (TDI) conduct a study “to determine the effect on the health care infrastructure in this state if the state Medicaid program is abolished or a severe reduction in federal matching money under the program occurs.” This report also analyzes the implications of a Medicaid termination in light of the recent federal legislation, the Patient Protection and Affordable Care Act (ACA).