Health & Social Policy

The Medicaid Debate Texas Should be Having

It seems that one of the major battles of the legislative session will come down, once again, to politics versus prudence.

While the Supreme Court upheld most of the federal Affordable Care Act (ACA), it ruled that states have the option of expanding Medicaid eligibility. Although Gov. Rick Perry and other state leaders have adamantly opposed expansion, major stakeholders including the Texas Hospitals Association support it.

Nearly one in four Texans are uninsured — the highest rate in the nation. Experts project that full implementation of the ACA will enable about 3 million more Texans to obtain insurance through Medicaid or the private market.

Whether some Texas politicians like it or not, the ACA isn’t going anywhere — and Medicaid expansion is an important part of making it work. The ACA requires everyone to have health insurance, but it doesn’t provide assistance to the poorest of the poor. Nearly 2 million uninsured Texans do not qualify for subsidies because they live below the federal poverty level, according to U.S. Census data. That’s where Medicaid should come in.

The vast majority of uninsured Texans (78 percent) are adults younger than 65. These are largely the working poor: people in the service industry, employees and owners of small businesses, part-time workers, and others whose employers do not provide health insurance. Medicaid expansion would ensure that these Texans aren’t taxed for being unable to afford private health insurance.

What’s more, the federal government picks up the tab for newly eligible enrollees through 2016, then gradually steps down to paying 90 percent of costs by 2020. Experts estimate that Texas would need to spend just $15 billion over the next 10 years to get about $100 billion in federal Medicaid funding.

This is money Texans are already spending on indigent health care. Texas hospitals spend $5 billion annually in uncompensated care. Texans pay for this care directly through property taxes to local hospital districts and indirectly through insurance premiums.

Texas lawmakers have the opportunity to help ease this burden by increasing insurance coverage while drawing down billions in federal tax money, which Texans are already paying. Medicaid expansion and other provisions of the ACA will ensure that our money is well spent.

It seems clear-cut, but it wouldn’t be the first time in recent memory that Texas has turned down federal health care funding over an ideological rift. In 2011, the nonpartisan Legislative Budget Board (LBB) recommended that Texas expand the Medicaid Women’s Health Program (WHP), which provides cancer screenings, annual exams and contraceptive services to low-income women. The LBB noted that operating the WHP  on average costs approximately $241 per woman. Since the federal government pays 90 percent of WHP patient costs, the state of Texas pays approximately $24 per woman. This is less expensive than the average cost to the state of $6,621 for a Medicaid birth and coverage in an infant’s first year of life.

Instead of taking the LBB’s recommendations, projected to save the state millions, the 82nd Legislature cut family planning funding and banned certain providers from the Women’s Health Program. Although a judge has ruled that Texas can ban abortion-affiliated providers from the program, the federal government cut off funding over the issue. Now Texas runs a smaller Women’s Health Program at a greater cost to the state.

Texas cannot afford to once again choose ideology and politics over good sense and prudent budgeting. Gov. Perry and some lawmakers argue that pouring more money into a “broken” Medicaid system isn’t a solution. If Medicaid is broken in Texas, it’s because we broke it. The Legislature has cut Medicaid costs over the years in part by paying health care providers less. It’s no surprise that doctors are increasingly refusing Medicaid patients.

Medicaid expansion is not a quick fix. It must be part of broad reforms that address Medicaid reimbursement rates, the shortage of doctors and nurses, and the growing costs of public and private health care in the state.

Other conservative states have come around, most recently Ohio. When Gov. John Kasich announced his support, he said that Medicaid expansion “makes great sense for the state of Ohio because it will allow us to provide greater care with our own dollars.” Similarly, Gov. Jan Brewer announced last month that Arizona would expand Medicaid, in part because it did not want to forfeit federal funding. Gov. Perry and Texas lawmakers should follow their lead.

The debate over whether to expand Medicaid in Texas should be over. In the coming months, Texans deserve a substantive debate about how to make Medicaid — and the Texas health care system — better for everyone.


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