Yet another report saying we should expand Medicaid in Texas

It’s the fiscally responsible thing to do, in addition to being the morally correct thing to do.

It’s constitutional – deal with it

Expanding Medicaid is a “smart, affordable and fair” decision for Texas, according to a report issued by Billy Hamilton, a non-partisan consultant commissioned by Methodist Healthcare Ministries of South Texas and Texas Impact, a statewide interfaith network.

“If politics are set aside, the right decision is obvious,” wrote Hamilton, a former deputy comptroller of public accounts who was once the state’s chief revenue estimator. He argued that for an investment of $15 billion, Texas could draw down $100 billion in federal funds and expand health care coverage to 2 million low-income Texans over 10 years.

One of the most important decisions facing Texas lawmakers in the 83rd legislative session is whether to expand Medicaid to low-income adults, as directed by the federal Affordable Care Act. Despite proclamations from Texas’ Republican leadership — namely Gov. Rick Perry and Lt. Gov. David Dewhurst — that Texas will not expand Medicaid, local government officials and health care providers across the state are pushing lawmakers to realize the benefits of it.

Hamilton’s report, the most thorough fiscal analysis yet on the impact of the Medicaid expansion on Texas, argues that state spending on the expanded Medicaid program would be offset by dramatic savings and that thousands of jobs would be created to boost the economy. Hamilton also says Texas’ uninsured rate — the highest in the nation — would drop by a quarter. He argues the expansion could save the lives of 5,700 adults and 2,900 children annually.

Hamilton was the chief number-cruncher for former Comptroller Carole Keeton Strayhorn. He joins economist Ray Perryman in pointing out the obvious, for whatever good it will do. Here’s more on his report from Texas Impact, who co-commissioned it.

The report provides funding estimates and Medicaid enrollment scenarios that rely on population and caseload projections by former Texas State Demographer Steve Murdock, and cost estimates from the Texas Health and Human Services Commission. The report provides three scenarios-“limited” (based on minimal enrollment), “moderate,” and “enhanced” (based on extremely high enrollment levels). All major findings are based on the “moderate” scenario.

The report compares these funding estimates with spending data from local jurisdictions and charity cost data from mandated, uniform hospital reports. The report explains the interactions between existing low-income health spending at the local level, and state and local fiscal impacts of extending Medicaid under the ACA. Impacts include anticipated increased enrollment by children who are currently eligible for Medicaid or CHIP but not enrolled, and who likely would enroll along with their newly eligible parents. The report also uses econometric modeling to estimate employment and economic impacts of adding low-income adults to Medicaid.

The report includes regional breakouts of caseload, spending and fiscal impacts for each of the state’s 20 Regional Health Partnerships (RHPs). The RHPs are multi-county regions coordinating health care spending and delivery under Texas’ new federal Medicaid Transformation waiver.

Key Findings:

• The state match required for the Medicaid expansion could be met many times over with funds the state, local jurisdictions and hospitals already spend on health care for low-income adults.
• The $1.8 billion in new state revenue generated by the expansion could offset about half of the state match required from 2014 through 2017.
• The economic activity from the infusion of federal funds would boost Texas economic output by $67.9 billion, and add $2.5 billion to local revenues during fiscal 2014-17.
• The economic activity would generate an estimated 231,000 jobs by 2016.
• Every region and every county in the state would benefit from the additional federal funds.
• The new coverage would reduce Texas’ uninsured rate by about 25 percent, insuring up to 2 million people.
• The new coverage would increase efficiency in state and local health programs by moving currently uninsured adults to managed care.
• The new coverage would save the lives of an estimated 5,700 adults and 2,700 children every year.
• Other states are also finding that current spending and new revenue would cover their state match requirements and provide savings.
• Failing to extend Medicaid would not improve the state’s likelihood of getting a block grant and would likely decrease the amount of funding the state would receive if a block grant were ever to occur.
• Due to provisions in the ACA, failing to extend Medicaid would leave low-income Texas adults with no access to subsidized insurance and no alternative but to use expensive emergency room treatment for routine care.
• (Key Findings also available in PDF format)

Overall State Fiscal Impact

For the 2014-15 biennium, Texas would receive $7.7 billion in federal funds for adults and $1.4 billion for children for a state match of $297 million for adults and $889 million for children–a total of $9.1 billion in federal funds for $1.2 billion in state match. For the 2016-17 biennium, Texas would receive $15.2 billion in federal funds for adults and $3.1 billion for children for a state match of $989 million for adults and $1.6 billion for children–a total of $18.3 billion in federal funds for $2.6 billion in state match.

The full report is here, and the executive summary is here. Expanding Medicaid is fiscally smart and will save thousands of lives. Millions of people lack access to health care in Texas. Medicaid expansion, especially in conjunction with comprehensive immigration reform, could do a lot to solve that problem. There’s no good argument against it – it’s all political. If there really is a deal to make it happen, we need to do it. But as long as Rick Perry, or someone like him, is Governor, I don’t see how it does happen. Nothing will change in this state until the government changes.

Related Posts:

• What will Texas do now?
• Nine hundred million reasons why expanding Medicaid is a good idea
• No Medicaid expansion for you!