No Medicaid expansion for you!

So much for that.

Texas will not expand Medicaid or establish a health insurance exchange, two major tenets of the federal health reform that the U.S. Supreme Court upheld last month, Gov. Rick Perry said in an early morning announcement.

“I stand proudly with the growing chorus of governors who reject the Obamacare power grab,” he said in a statement. “Neither a ‘state’ exchange nor the expansion of Medicaid under this program would result in better ‘patient protection’ or in more ‘affordable care.’ They would only make Texas a mere appendage of the federal government when it comes to health care.”

Perry’s office said he’s sending a letter to U.S. Health and Human Services Secretary Kathleen Sebelius [Monday] morning asserting his opposition, both to accepting more than a hundred million federal dollars to put more poor Texas adults onto Medicaid, and to creating an Orbitz-style online insurance marketplace for consumers.

Of course, opting out of creating a state exchange means that the federal government will create one instead. It does not mean there will be no exchange in Texas. This is why some Republican legislators like Rep. John Zerwas tried to pass a bill to create an exchange, so that it would be implemented by Texas instead of the federal government. The rationale for not implementing the state-run exchange confounds me, but I have never been Rick Perry’s intended audience.

As for the refusal to expand Medicaid, just on Friday the Dallas Morning News reported that Perry was still thinking about it.

Gov. Rick Perry won’t say whether Texas should take or reject the federal largesse that could allow the state’s Medicaid program to cover more poor adults.

But a spokeswoman confirmed Friday that his aides have begun canvassing health care provider groups for their opinions about expanding Medicaid and creating a state health-insurance exchange

Though he’s a staunch opponent of President Barack Obama’s federal health care law, Perry’s reluctance to declare immediate opposition to the Medicaid expansion after the Supreme Court’s ruling last week puts him at odds with several other Republican governors. Some, such as Florida’s Rick Scott, have already vowed to keep their states on the sidelines, taking advantage of the court’s ruling that they can do so without jeopardizing the funds they already receive.

Perry spokeswoman Catherine Frazier played down the calls as routine outreach on a major issue. But several health-care lobbyists and experts said it’s shrewd for Perry to say little because the Supreme Court ruling gives him leverage to negotiate with the Obama administration for tighter Medicaid eligibility rules and leaner benefits before agreeing to the expansion, which would take place starting in 2014.

“It’s smart politics because there’s no need to make a decision at this time, and he and a lot of Republicans are playing for more flexibility within the program,” said Tom Banning, chief executive and executive vice president of the Texas Academy of Family Physicians.

Apparently, he didn’t listen very closely to what the health care providers want, because they have made their preference quite clear.

Getting the Medicaid expansion in place has already become the “number one priority” for the Texas Hospital Association, said John Hawkins, the senior vice president for advocacy and public policy at the organization. “It’s the kind of thing that hits our members right on the margin when they’re trying to digest other payment cuts,” he said.

Twenty-seven percent of working-age Texans, or more than 6.1 million people, were uninsured in 2010, according to the Kaiser Family Foundation. That’s the highest rate in the nation and the second-highest number to California’s 7 million people. Under the Medicaid expansion, 2.5 million Texans would qualify, the Urban Institute estimates.

But Texas Gov. Rick Perry (R) has been a staunch opponent of health care reform and his administration has indicated a willingness to opt out of the Medicaid expansion. For Texas hospitals, which absorbed $4.6 billion in unpaid bills and charity care in 2010, that’s a problem, Hawkins said.

I’m thinking that will provide for some interesting fundraising pitches this fall. My advice to them is to start donating to Democrats now.

So now Rick Perry will take a victory lap on Fox News and bask in the adulation of his cultish supporters. Everyone else will have to deal with the reality of this, starting with county taxpayers.

It's constitutional - deal with it

Unlike many states, Texas does not directly subsidize the cost of caring for the uninsured. Instead, taxpayers in Dallas County and elsewhere help pick up that tab through property taxes that support safety-net hospitals such as Parkland Memorial Hospital.

Last year, Parkland reported that its own cost for delivering uncompensated care was $335 million. Dallas County taxpayers funded $425 million, or 35 percent, of the hospital’s operating budget.

For the average Dallas County homeowner, that created a hospital tax bill of $370.

Some advocates of health reform say the new revenue from Medicaid payments is large enough that hospital districts — whose budgets are controlled by county commissioners — could reduce their tax rates.

[…]

Some experts expect that Texas will eventually accept the Medicaid funding. After all, the federal government would cover the entire cost of the expansion between 2014 and 2016. Hospitals that have struggled to find ways to offset charity care are certain to demand that state lawmakers take the money.

“It really depends on the political pressure they get from the counties and the hospitals that benefit from having these people covered,” said John Holahan, director of the Urban Institute’s Health Policy Center. “To leave all this federal money on the table will create an intense debate.”

The hospitals are big losers as well.

Hospitals regularly get stuck with bills that the uninsured cannot afford to pay. Every year, the American Hospital Association adds all those bills up to calculate the total amount of uncompensated care that its members provide. Every year, the number gets bigger and bigger, hitting $39.3 billion in 2010. Here’s a chart I put together with the AHA data:

Under the health reform law, hospitals will see reductions in some of their Medicare reimbursement rates. They will be forced to deliver higher quality or see financial consequences.

All of that was worth it, in hospitals’ eyes, because of the insurance expansion. That would finally put someone on the hook for the medical bills that have, for decades, gone unpaid.

If states opt-out of the Medicaid expansion, that essentially means there’s no one on the hook for some of the poorest patients. And that explains why Bruce Siegel, president of the National Association of Public Hospitals, calls states opting out a “potentially disastrous outcome” and is urging Congress to come up with a fix. For them, the status quo is the worst possible outcome: One where they have accepted cuts to Medicare, and still get stuck with billions in unpaid bills.

Remember, a part of the Affordable Care Act was a reduction in the federal subsidy for uncompensated care costs because it assumed the expansion of Medicaid would greatly reduce the number of uninsured patients. Unfortunately, no one foresaw the SCOTUS decision striking down the provision that states would lose existing Medicaid funding if they didn’t accept the subsidies to expand it, and so here we are. Just as a reminder, states like Texas that have a lot of uninsured people would have benefited greatly from it as a result. It was a simple case of red state/blue state math.

The deal the federal government is offering states on Medicaid is too good to refuse. And that’s particularly true for the red states. If Mitt Romney loses the election and Republicans lose their chance to repeal the Affordable Care Act, they’re going to end up participating in the law. They can’t afford not to.

Medicaid is jointly administered between states and the federal government, and the states are given considerable leeway to set eligibility rules. Texas covers only working adults up to 26 percent of the poverty line. The poverty line for an individual is $11,170. So, you could be a single person making $3,000 a year and you’re still not poor enough to qualify for Medicaid in Texas. That’s part of the reason Texas has the highest uninsured rate in the nation.

Massachusetts, by contrast, covers working adults up to 133 percent of the poverty line — partly due to a former governor whose name rhymes with Schmitt Schmomney. It’s a big reason it has the lowest uninsured rate in the nation.

The Affordable Care Act wants to make the whole country like Schmitt Schmomney’s Massachusetts. Everyone earning up to 133 percent of the poverty line, which is less than $15,000 for an individual, gets Medicaid. And the way it does that is by telling states the feds will cover 100 percent of the difference between wherever the state is now and where the law wants them to go for the first three years, and 90 percent after 2020.

To get a sense of what an incredibly, astonishingly, unbelievably good deal that is, consider this: The federal government currently pays 57 percent of Medicaid’s costs. States pay the rest. And every state thinks that a sufficiently good deal to participate.

But, somewhat perversely, the states that get the best deal under the law are states like Texas, which have stingy Medicaid programs right now, and where the federal government is thus going to pick up the bill for insuring millions and millions of people. In states like Massachusetts, where the Medicaid program is already generous and the state is shouldering much of the cost, there’s no difference for the federal government to pay.

So if Texas had accepted Medicaid expansion, it would have gotten a vastly better deal than states like New York, California, and Massachusetts. Now that Texas has decided to “send that money back” to Washington, we will subsidizing the Medicaid expansions of New York, California, and Massachusetts, and getting nothing in return. Does that sound like a good idea to you? BOR, Neil, EoW, Juanita, Hair Balls, Ed Kilgore, Sarah Kliff, and Rep. Garnet Coleman have more, and statements from Rep. Jessica Farrar and Sen. Rodney Ellis are beneath the fold.

Today’s announcement by Governor Rick Perry confirming that Texas will neither implement a state insurance exchange or expand Medicaid included in the Patient and Protection and Affordable Care Act (PPACA) will take Texas further down on the national list for health care quality to the only remaining spot left: nowhere.

“Governor Perry continues his disillusioned extremist political crusades at the expense of Texas families,” said House Democratic Leader, Jessica Farrar. “Texas is one of the states most in need of the support that the PPPCA offers. Because of his ideological crusades, Governor Perry is ensuring that Texas’ uninsured population will remain the highest in the nation, while other states receive care. Besides the human cost, his failure to draw down the 9-1 federal match is just not fiscally smart at a time when health care costs continue to spiral upwards. Local taxpayers will ultimately shoulder the heightened those with untreated illnesses becomes chronic emergency room cases.”

The optional provision would expand the Medicaid program to cover individuals under age 65 with household incomes at or below 133% of the federal poverty level as of January 2014. Texas stands to gain the most, at $124 billion, in new federal funds from this expansion.. To turn the funds down due to the windmill idea that this is an “intrusion into the sovereignty of our state” hurts Texas families across the board, uninsured and insured alike. With Congressional district (CD 29) having the most uninsured rate in the entire nation located in Houston, Texas, at 43% of its individuals, Governor Perry needs to look into the faces of people, not political phantoms.

State Senator Rodney Ellis (D-Houston), released the following statement regarding Governor Rick Perry’s announcement that Texas will not enact key elements of the landmark Affordable Care Act, despite ranking near the bottom in nearly every major health category.
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“I am extremely disappointed in Governor Perry’s announcement that he plans to do nothing to implement key provisions of the Affordable Care Act that would provide access to health insurance for millions of hard-working Texans. His plan is short-sighted and, thankfully, not the final word. Next year, the legislature can take steps to implement health exchanges and expand access to Medicaid, and I will work with my colleagues on both sides of the aisle to make this happen.

“This issue is too important to let politics and rhetoric rule the day. Texas leads the nation in percentage uninsured, has one of the highest poverty and food insecurity rates, and has vast shortages of doctors, dentists, and nurses. In fact, Texas ranks at or near the bottom in nearly every important health care statistic you can name, and just chose to cut $10 billion more from our health care budget, including under-funding Medicaid by about $4 billion, plus deeper cuts to already-minimal services. We have an historic opportunity to finally do something about these dismal numbers, but, instead, we are choosing to stand in the doorway and say ‘no.’

“That is not good enough.

“The simple fact is that we have to do something to address this crisis. Thankfully, Texans are already benefiting from the Affordable Care Act. Health plans must now spend 80 to 85 percent of every premium dollar on health care, insurers can no longer deny coverage to children with pre-existing conditions, young adults can be covered under their parents plan until 26 years, and tax credits are available to small businesses to help cover premium costs. More than 120 of Texas’ largest employers have received over $445 million in federal support to make early retiree health coverage more affordable. In addition, 2.2 million Texas seniors in Medicare received preventive services or check-ups with no co-pay, and Texans saved $135 million on prescription drugs as a result of closing the Medicare prescription drug ‘donut hole.’ But, the greatest gains will come in 2014 when approximately 2 million more uninsured Texans could gain coverage through Medicaid and CHIP, but Texas must opt in to the expansion and that is now going to be a big fight.

“The ACA was intended to extend coverage to the majority of individuals, most notably portions of the most vulnerable populations that are currently excluded from Medicaid coverage because they do not have children and are not pregnant or disabled.

“This Medicaid expansion will provide coverage for low-income adults who are at or below 133 percent of the federal poverty level ($14,856 per individual or $30,657 for a family of four), are less than 65 years old, and do not otherwise qualify for Medicaid. For these individuals, Medicaid will mean the opportunity to have a primary doctor and continuity in care reducing their reliance on the expensive care currently provided in emergency rooms. For this expansion, Texas will receive a 100 percent match for the first three years and gradually reducing to 90 percent of funding thereafter.

“Individuals at or above 100 percent of poverty will have the ability to purchase health insurance with subsidies through a federal health exchange or one-stop shop for health insurance, even if Texas decides not to run its own exchange, ensuring these populations will have access to quality, affordable health insurance. Unfortunately for most individuals below 100 percent FPL who are not currently covered by Medicaid there is no safeguard, so we must decide to do the right thing and enact laws to protect these Texans.

“Critics of the Affordable Care Act constantly say ‘Texas knows how to take care of Texans better than Washington.’ Well, it is time to prove it. Instead of just saying ‘no’, let’s see a plan to provide more Texans with insurance. No more politics — let’s see a plan that actually helps Texans.

“Having access to quality, affordable health insurance is a fundamental human right and not a privilege. The Supreme Court has spoken and the Affordable Care Act is now officially the law of the land. It is long past time to remove narrow politics from the health care debate and focus on truly improving health of women, children, and all Americans. We can and must do better.”

Related Posts:

• What will Texas do now?
• Medicaid expansion pressure is having an effect
• New flash: Dropping Medicaid would be bad