It's no secret there's a health-care crisis in Texas. The state has the biggest uninsured population in the country with around 6.2 million—or a quarter of all residents—lacking insurance. As a Kaiser Health News report highlighted, poor and uninsured Texans must sometimes wait more than 24 hours in emergency rooms, where treatment is most expensive, while more cost-effective health-care options, like preventative care, are out of reach.
The Affordable Care Act was supposed to change all that. It offered new avenues for health-care coverage to people at all income levels by expanding Medicaid. But yesterday's Supreme Court decision made it optional for states to expand their Medicaid coverage. "There's going to be a donut hole in the middle if a state doesn't proceed," says Edwin Park, vice president for health policy at the D.C.-based Center on Budget and Policy Priorities. In Texas, if the state chooses not to expand its services, almost two million people may be stuck in limbo—without access to Medicaid, but too poor for the subsidies.
First, a little background about the Court's decision: A key element of the ACA was expanding Medicaid to provide insurance for those making up to 133 percent of the federal poverty line; those who make above that amount can receive subsidies to help pay for their insurance. Prior to the ruling, states had little choice but to expand their programs by January 2014; if they did not, they risked losing all their Medicaid dollars. Now, however, the Court has ruled that states can only lose the extra dollars they would get through expansion, meaning they'll keep the Medicaid dollars they're already getting.
As I wrote earlier, the expansion is a great deal for states. The federal government will pay 100 percent of the costs of the expanded coverage for the first three years, and overall, states will never pay more than 10 percent of the costs for the extra people served. Over the next decade, states will only pay an estimated 2.8 percent more. Meanwhile, they'll see huge savings as more people get insurance and can access preventative care, rather than relying on emergency rooms.
The impact in Texas would be extraordinary. Poor parents have to be almost destitute in order to qualify for Medicaid in Texas, because the state is unusually stingy with Medicaid eligibility. The poorest adults without children can't get any help unless they're disabled. Hospitals, as well as local and state governments, must shoulder what's known as "uncompensated" health costs—the bills of uninsured people that will likely go unpaid. Those with insurance also wind up paying extra in their premiums to balance the debts; according to the Texas-based Center for Public Policy Priorities, the average family in Texas pays about $1,800 more for uninsured people's care. The state may be paying more now in uncompensated care costs than it would pay for Medicaid if the program were expanded to cover more people, says CPPP senior policy analyst Stacey Pogue.
Not expanding Medicaid would be a terrible idea. "We would be leaving probably 1.5 million or 2 million without any [health care] options" in Texas, says Anne Dunkelberg, CPPP's associate director. "We would be leaving billions and billions of federal dollars on the table if we didn't enact that. The best thing to do for low-income Texas families is to move forward" on the expansion.
That doesn't mean Texas lawmakers will choose to extend benefits, now that the ball's in their court. Texas Governor Rick Perry is firmly opposed to the ACA and called yesterday's Supreme Court decision to keep most of the bill intact "a stomach punch to the American economy." He wasn't alone. The speaker of the House and the Senate Health Committee chairwoman both put out press releases lamenting the news.
More troubling, however, was Texas Health and Human Services Commissioner Tom Suehs' statement, which specifically addressed the Medicaid expansion:
The court clearly recognized that the Affordable Care Act put states in the no-win situation of losing all their Medicaid funding or expanding their programs knowing that they would face billions of dollars in extra costs down the road. I remain concerned that expanding Medicaid without reforming it only multiplies the tremendous budget pressure the program puts on states. Medicaid already consumes a quarter of the state budget in Texas, and enrollment and costs would mushroom under the Affordable Care Act.
Texas state Representative Charles Perry, a Lubbock Republican with Tea Party support, says he'd be opposed to an expansion. Perry, who's in his first term, spent the legislative session working on Medicaid-funding issues. Like many who hope the ACA will still be repealed, he believes it doesn't do enough to cut costs, and he argues that more reforms are needed in the state, like savings from technological changes. "We do not use our health-care dollars efficiently in the state of Texas," he says.
Perry believes the Medicaid expansion will ultimately costs more—and won't produce savings. "Changing the nature of the consumer behavior through this act is not realistic," he told me when I asked if having fewer uninsured people wouldn't produce savings in emergency-room costs and hospital bills. He's even skeptical of the extra federal funding for the Medicaid expansion, saying it's likely "the beginning of something that ultimately ends up being unaffordable and ineffective."
The trouble is, Texas's uninsured population is reaching a crisis point. This expansion would offer a life preserver to those poor adults currently without health-care options. Other states with conservative leadership, like Wisconsin, have benefited greatly from extending Medicaid benefits.
Pogue is hopeful that a strong coalition will convince Texas lawmakers that the expansion is necessary before the next legislative session begins in 2013. "We're talking about a huge investment of federal dollars and state investment which is small by comparison," she said. "I'm not willing to assume at this point that Texas isn't going to do the Medicaid expansion."
The health of millions of people depends on it.