Medicaid Expansion in Spotlight as Session Heats Up

Will Texas expand Medicaid under the Affordable Care Act? That’s the $100 billion question at the Capitol this session. The state’s Republican leadership says no, but supporters of federal health care reform may be gaining traction.

A recent report by former Deputy Comptroller Billy Hamilton indicated that if the state spent $15 billion on a Medicaid expansion over 10 years, it would get $100 billion back, and about 231,000 new jobs by 2016. 

Audio: Ben Philpott's story for KUT News

“To look at something that helps to create jobs in Texas, that helps improve the health of Texans, their ability to work and then to have a more dependable way to access health care are all pluses in our minds on this," said Maureen Milligan, president and CEO of the Teaching Hospitals of Texas.

Of course, there are arguments against expansion. One survey by the Texas Medical Association estimates that about 30 percent of doctors would take new Medicaid patients. Dr. John Holcomb, who has a private practice in San Antonio and works on Medicaid issues for the TMA, attributes the low buy-in to the state’s Medicaid reimbursements.

“You could argue that if you keep paying 68 percent of the Medicare rate, you’re gonna have 1.5 million new Medicaid beneficiaries that have cards but have no place to go with them," Holcomb said.

That could happen in the cities. But Jerry Massey, senior vice president for the East Texas Medical Center Regional Healthcare System, said that's not true in rural Texas.

He said the rural clinics he represents are required to take Medicaid patients. The newly insured may strain the system, but doctors will see them. And even if patients were to end up in the emergency room, it could still be a cost savings.

“It’d be very advantageous to us if we could, for example, cut our uncompensated care from 13 to 15 percent, which we see now, to 8 percent or so," Massey said. "That would be an enormous amount of money that would go into a rural health care system and would actually make it possible for us to provide additional care to everyone."

Uncompensated ER care is a big deal in the state’s big cities, too. Holcomb said that from San Antonio to El Paso to Houston, the federal money offered to expand the Medicaid rolls would greatly benefit the hospital districts currently covering bills for the uninsured.

“Local taxpayers are already paying for the care of those patients," Holcomb said. "It’s just that the care is being delivered in the wrong place, definitely at the wrong time and certainly at the wrong price."

Not only would the federal government foot the bill for Medicaid expansion, but Holcomb said it gets people into a system that leads them away from the high-cost ERs.

None of these arguments appears to have swayed the state’s Republican leadership yet. But Milligan said the GOP’s refusal to expand could put Texas in a good position to negotiate a tailored plan if — or, as she hopes, when — the state eventually accepts expansion.

“Potentially, that could give a state a little bit more flexibility and a little bit more negotiating room with the federal government," Milligan said.

Battle lines drawn

Some health care providers are still figuring out what Medicaid expansion would mean for them. While lawmakers at the Capitol have already drawn a line in the sand, Gov. Rick Perry reaffirmed his position during his recent State of the State address.

“We’ve made it clear Texas will not expand Medicaid under the ACA," Perry said.

The governor's position is supported by Kyle Janek, the state's executive commissioner of health and human services. He worries that an expansion would change little, because it would pour more money into a broken and unfixable system.

“The point is you’re going to create a program that is going to continue to underpay the provider network — grossly underpay the provider network — to provide this care for the uninsured," Janek said.

Democrats agree Medicaid isn’t perfect but say the projected $100 billion being offered over 10 years is just too much money to pass up. State Sen. Rodney Ellis, D-Houston, has filed a bill that would let voters decide whether the state should expand Medicaid. During a rebuttal to Perry's State of the State address, state Sen. Kirk Watson, D-Austin, worried the arguments against expansion have little to do with whether or not it would help the state.

“Almost because of just disliking who might have won an election, we’re not going to focus on something that will make citizens of this state healthier and make our economy healthier," Watson said.

Republicans say they’d be more than happy to take the money, but only in the form of a block grant that the state would administer.

Texas has been asking for and not receiving a waiver to create such a program since George W. Bush was president.