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Straus wants someone to do something on Medicaid

Don’t we all, Joe. Don’t we all.

Rep. Joe Straus

Seeking to light a fire under fellow Republicans to provide health care to more uninsured Texans, House Speaker Joe Straus said Wednesday that it is time to “get our heads out of the sand” and find an alternative to Medicaid expansion that would bring billions of federal dollars to the state.

Straus said he and other Republicans have made it clear that they oppose expansion of Medicaid as the program now stands.

“But I think it’s time that we said more than that,” he said. “It’s time that we put forth a good-faith effort to find a Texas solution. We need to move beyond the word ‘no’ to something that the administration might entertain. There are no winners if nothing is agreed to. We have a very large state, a significant population of uninsured people … and I think it could be an opportune time to put some proposals on the table that could be supported by Texas leadership.”

Straus, R-San Antonio, said elements to focus on include subsidies to allow people to obtain private coverage, promoting personal responsibility and cost-sharing, such as co-pays and deductibles.

Straus said there may be a way to tie a plan to a reduction in local taxes, since a key argument for expansion is that it would relieve local taxpayers of some of the burden they now bear to cover the cost of treating uninsured people in public hospitals.

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It is unclear exactly how the conversation will move forward, but Straus said it is important to gear up talks with the aim of building consensus behind a Texas solution.

“We need to make the right business decision for Texas taxpayers,” Straus said. “Local governments have to carry a very heavy burden and look, poor people are going to get sick. They’re going to be treated. And somebody’s going to pay for it.”

Nice talk, if plenty vague. But let’s keep these things in mind:

- Medicaid is going to be cheaper than private insurance. If there’s a problem with doctors not accepting Medicaid, that’s entirely within the Lege’s discretion to fix, since the Lege sets the amount that doctors get paid from Medicaid. But even with more generous reimbursements, Medicaid is going to be less expensive than insurance provided by a profit-seeking enterprise.

- The single biggest obstacle in all this is Rick Perry, with Greg Abbott right behind him. These guys just don’t care about this issue. I can’t state it any more plainly than that.

- Of course, after ten years of complete Republican control of Texas government, the only reason people like Joe Straus are even talking about this is because they have to, thanks to the efforts of President Obama and Congressional Democrats. Texas leads the nation in uninsured people, a situation that has only gotten worse under the Republicans. What little progress there has been has been in spite of the Republicans. It didn’t have to be that way, but it was and is. I’m glad that Straus wants to do something, but I don’t take it as a change of mind, just as a recognition of the lay of the land. He hasn’t exactly been powerless to effect change before now, after all.

Be that as it may, there was a hearing in the House on Friday to talk about just what Texas might do to expand health care access, whether Medicaid or something else.

There are thousands of scenarios that the state could take to expand and reform Medicaid, Kyle Janek, executive commissioner of the Texas Health and Human Services Commission, told the committee. But “we don’t have something on paper,” he said. Janek said he is awaiting further direction from the Legislature to craft a specific plan.

Rep. Sylvester Turner, D-Houston, referenced a compromise Arkansas’ Republican-led Legislature reached with the federal government, and said if “the people in Arkansas are much more capable of designing a system than the people in the state of Texas, that has taken us to a different level.” He called on his colleagues to stop being critical of the Medicaid expansion presented by the Affordable Care Act and to ask themselves “whether or not Texas has the ability to design something that works for Texas.”

Requiring Medicaid patients to make co-payments for their care — an option that has received support from Perry, Straus and other GOP members — is allowed under the Affordable Care Act, Janek said. He said if Texas took a different route and attempted to subsidize private health plans through an Orbitz-style health insurance exchange like Arkansas, the state would need to set up policies to ensure benefits offered by Medicaid that weren’t covered by private plans didn’t disappear.

“I think the public has a misconception that Medicaid expansion will get us the greatest bang for our buck,” said Rep. Lois Kolkhorst, R-Brenham, who chairs the House Public Health Committee. “For Texas, the bang for our buck is really in the exchange, the subsidy [for] people going into private insurance.”

Kolkhorst said without expanding Medicaid, other tenets of the Affordable Care Act would reduce Texas’ uninsured rate from 24 percent — the highest in the nation — to 16 percent. Including the Medicaid expansion would drop the uninsured rate slightly more, down to 12 percent.

As noted above it’s actually almost 29 percent. But who’s counting?

In total, unreimbursed charity care creates a $4.3 billion annual tax burden on local government entities and public hospitals, Billy Hamilton, the state’s former chief budget estimator, told the committee. Overall, he said, there is enough local and state spending in the current system to cover the state’s share of Medicaid expansion costs.

“I know this is a controversial issue… but I don’t really think you’re going to see a more overwhelming fiscal opportunity during your service here,” said Hamilton. “I served this Legislature for 30 years and I’ve never seen anything like it.”

The committee also heard testimony from judges from Harris and Dallas counties who spoke in favor of expanding Medicaid, and from John Davidson, a policy analyst from the conservative Texas Public Policy Foundation, who spoke against Medicaid expansion.

Rep. John Zerwas, R-Simonton and an anesthesiologist, said Texas needs to ensure that any expansion of reform of Medicaid include ways to incentivize more health care providers to accept those patients. If it doesn’t, those patients will end up in the highest-cost environments, emergency rooms. Zerwas pointed out that only 32 percent of doctors are willing to take Medicaid patients in the existing program, under current reimbursement rates.

Rep. Donna Howard, D-Austin, said the Legislature should be held responsible for this lack of Medicaid providers, because lawmakers set those reimbursement rates. “The provider capacity is a real issue for this system, whether we expand or not,” she said.

So that’s Ed Emmett and Clay Jenkins, two guys who live in the real world and have to deal with the real world consequences of having thousands of uninsured people needing medical services their counties provide, versus some pampered, well-paid shill from a right-wing think tank. In a just world, that would be no contest. I’m glad to see Rep. Turner address the Arkansas plan, as that’s the first comment I’ve seen from a Democratic official about it. Again, it’s not my preference but if it’s that or nothing I’ll grab it with both hands.

In the end, as the updated story from the Trib notes, the Lege punted to the HHSC for now.

Rep. Zerwas filed legislation Friday that would grant the Health and Human Services Commission authority to craft “a Texas solution” to Medicaid reform and negotiate with the Obama administration to draw down billions in federal financing to expand Medicaid services.

As debate in the House Appropriations Committee on Medicaid expansion revealed Friday morning, the House remains divided on how Medicaid should be reformed and whether the program should be expanded. Currently, House Bill 3791 is a shell bill that will be altered as state legislators continue to negotiate how Medicaid should be reformed.

“We felt like it was time to start to get the ball moving on this. We’ve made it pretty clear that we’re not for current Medicaid expansion, but we do need to be for something else,” said Zerwas on Saturday, “because I think its very important for the state that we determine a way to cover this group of people that are currently uninsured.”

HB 3791 directs the HHSC to negotiate with the Obama Administration, so that Texas can draw down Medicaid expansion financing while implementing Medicaid reforms that enhance “personal responsibility” of Medicaid recipients, such as copayments or deductibles. It also includes a severability clause to end the agreement if the federal government reduces it share of Medicaid expansion financing.

As it stands, the HHSC does not “have a legislative directive or mandate to go forward on this, and that’s what this is intended to be,” said Zerwas, explaining the bill gives state lawmakers the opportunity to weigh in on how Texas should tailor a Medicaid expansion agreement with the federal government. The bill prompts the HHSC “to move forward on something that the Legislature, the [state] leadership is comfortable with that is in the best interest of Texans and allows us to pull down those dollars, which ultimately are our dollars,” he said.

In other words, they still don’t know what they want, but some of them at least have decided that doing nothing isn’t the best idea. I’m confident the Obama administration will be flexible in the negotiations given what we’ve seen them allow so far. It remains to be seen how flexible the state of Texas will be.

Finally, Sara Kliff provides some useful information about what the Arkansas plan really means, via an interview with George Washington University’s Sara Rosenbaum, an expert on Medicaid policy.

Sarah Kliff: Right now, you have a number of governors looking at the idea of using Medicaid expansion funding to buy private health insurance for enrollees. How novel of an idea is that?

Sara Rosenbaum: It’s been treated as this brand, new thing, but I don’t actually think it’s completely revolutionary. Keep in mind that states have been using Medicaid to buy managed care plans since the beginning of Medicaid. The whole notion of this as a conceptual breakthrough for Medicaid feels a bit off for me.

It does happen though that this is in Arkansas, which traditionally has not been a buyer of managed care, not a place like Arkansas, and not somewhere like Texas which has been buying managed care.

One of the good things about it, from my perspective, is that it gives you more stability of coverage, or gives you the chance at stability. You’re brought into a plan to stay.

SK: So the idea is, if your Medicaid expansion population is in private insurance, they won’t have to bounce back and forth between private and public plans.

SR: It does address a problem of churn. Four years ago I raised this and put this forward to House and Senate committees as a model. It was met with a lot of opposition from Medicaid advocates, which I didn’t totally understand having worked in Medicaid for almost four years now.

The need for stability of coverage is so great. These are the youngest, healthiest and lowest-income workers. All they have to do is churn from different insurance plans two or three times, and they’re going to say I’m through with this. And these are the exact people we want to enroll.

There’s more about the costs and other aspects of this that are worth your time to read. I still don’t believe the Republicans care enough to actually do something about this – note Kyle Janek’s remark about not having something on paper – but I will be happy to be proven wrong. EoW has more.

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4 Comments

  1. Yvonne Larsen says:

    “Medicaid is going to be cheaper than private insurance”

    For whom will it (Medicaid) be cheaper?

  2. For whoever is paying for it – the state, the feds, and ultimately everyone. Here’s a good, detailed discussion:

    http://www.arktimes.com/ArkansasBlog/archives/2013/03/08/private-option-likely-to-cost-taxpayers-hundreds-of-milllions-a-year-more-than-medicaid-expansion

    The simple fact of the matter is that private insurance comes with a profit margin built in, which Medicaid does not. As such, if you have a choice between paying for Medicaid for, say, 100,000 people, and buying private insurance for them, even at bulk rates, paying for Medicaid will cost less.

  3. Ross says:

    Profit on insurance depends on whether the plan is from a mutual or a stock company. I’ve thought for a long time that the law should forbid stock companies from providing insurance, other than as administrators for a self insured plan. Profit seeking skews the motivations for medical insurance, placing the incomes of executives above the needs of the insured. These motivations are severely reduced for mutuals, as there is no stock price to support. A mutual that makes a profit either keeps the profit as a reserve, or returns it to policy holders in the form of dividends or lower rates.

    Of course we also need to discuss the morality of taking from one segment of society to provide services to another segment that has no motivation to reduce their consumption of what is essentially, to them, a free service. As I heard someone who has a cash based job say a while back, “Why would I pay for insurance when I can get treatment at the County for free?”

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