Report: State Should Put Politics Aside, Expand Medicaid

Expanding Medicaid is a "smart, affordable and fair" decision for Texas, according to a report issued by Billy Hamilton, a nonpartisan 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 83^rd 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, who was recently chosen to consult the embattled Cancer Prevention and Research Institute of Texas on its fiscal policies, said failing to expand Medicaid "will place low-income individuals, local cities and counties and the entire state health care system at a significant disadvantage going forward.”

In contrast to arguments that the Medicaid expansion would cost Texas too much money, Hamilton finds state spending on the Medicaid expansion could be met “many times over” with existing funds that the state, local jurisdictions and hospitals already spend on unreimbursed charity care for low-income adults. An estimated $1.8 billion in new state revenue generated by the expansion could offset the state’s match for the Medicaid expansion from 2014 to 2017, Hamilton says, adding that an estimated 231,000 jobs, $2.5 billion in local revenue and $67.9 billion in total economic output could be generated by 2016.

Opponents of the Medicaid expansion argue the “one-size-fits-all” federal program fails to meet the state’s needs and that there is no guarantee the federal government will continue funding the program at high levels, leading to uncertainty over the burden to future state budgets.

Perry has compared Medicaid to the Titanic, arguing that the state shouldn’t add more people to a sinking ship. Rather than expand a broken system, opponents of the expansion argue Texas should apply for a block grant from the federal government to create a program unique to Texas.

Hamilton’s report counters these claims, arguing that Texas could build in “an automatic ‘trigger,’ such as Arizona is doing, to reduce Medicaid-optional populations and services should Congress reduce the match rate in the future.” The report also argues that lawmakers in favor of a Medicaid block grant should support the expansion, as the federal government bases block grants on historical funding levels, “so maximizing federal funding now would better position Texas in the event of any future conversion to block grants.”

Check out these Tribune interactives to compare state Medicaid expansions, weigh the effects of expansion on Medicaid caseloads and spending, and visualize the impact the expansion could have on Texas' uninsured.