Texas Gov. Rick Perry says he rejects the “Obamacare power grab” and will block measures expanding health insurance to millions in his state. The country’s second-biggest health insurer is betting he won’t succeed.
The same day last week that Perry said expanding Medicaid would be like “adding a thousand people to the Titanic,” WellPoint Inc. disclosed an agreement to buy Texas’s biggest Medicaid managed care company for $4.9 billion. The purchase of Amerigroup, which operates in 12 other states besides Texas, is WellPoint’s attempt to cash in on the health act’s addition of 17 million Americans to Medicaid, the state and federal program for the poor.
But if there’s one thing more powerful than Republican governors’ dislike of the Affordable Care Act, many believe, it may turn out to be the business interests in their own states.
“Once the headlines die down, every hospital in Texas is going to look at Perry and say, ‘Please tell me why we’re not taking money from the federal government to offset my uncompensated care,’” said Thomas Carroll, who follows health insurance stocks for investment firm Stifel Nicolaus. “That is a question that Rick Perry absolutely cannot answer.”
A higher portion of Texans lack coverage than residents of any other state. A Texas Medicaid expansion would generate $100 billion in federal money for the state over a decade, according to the state Health and Human Services Commission, and furnish coverage to an estimated 2 million Texans.
At the same time it would generate nearly $1 billion in annual Texas revenue for Amerigroup and WellPoint, calculates Carroll.
Quiet for now, insurers are expected to join hospitals and patient advocates to fight for Medicaid expansion and what are enormous amounts of money, even by Washington standards. Nowhere are the dollars bigger than in Perry’s state, where one in four lacks health coverage.
With that kind of money at stake, you have to figure the big insurers will invest whatever resources they need to put themselves in a position to reap the reward. Burka is skeptical, however.
Perry has no interest in improving state services, no interest in fixing the problems of the uninsured, no interest in supporting a business entity that lives off funding for Medicaid. This is a guy who turned down federal unemployment funds during a terrible recession. He is an ever-ambitious, purely ideological politician who is looking for the next step up the ladder after leaving the presidential race. If, as the author of this piece suggests, “every hospital in Texas is going to look at Perry and say, ‘Please tell me why we’re not taking money from the federal government for uncompensated care,’” here’s what Perry is going to say: “Because I said so.”
If so, then perhaps it’s time for all these folks to start supporting candidates who do have an interest in improving state services and fixing the problems of the uninsured. I wonder who that might be? EoW has more.