Health Care Trade Groups Lend Their Support to Medicaid Expansion

Despite the resistance of Gov. Rick Perry and many other Republicans to expanding Medicaid in Texas under the Affordable Care Act, some momentum seems to be building from outside of the Capitol in support of the expansion.

Texas’ two largest health care trade associations, the Texas Medical Association and the Texas Hospital Association, have announced support for extending Medicaid coverage to low-income adults. But both organizations also say that in order for the plan to work in Texas, lawmakers here also must implement reforms that will contain costs and bring more doctors into the Medicaid program to provide care for the additional patients.

“The most viable path is to try to work with [the federal government] to create a reformed program that does meet the needs of Texas better,” said John Hawkins, senior vice president of government relations at the Texas Hospital Association. He said the plan to expand must be bipartisan. Democrats must be flexible in considering “personal responsibility” reforms, such as requiring some new patients under the expansion to pay co-pays. And Republicans, he said, must “play ball” because the current system is fiscally inefficient. “We’re still providing this care at the local government level, but we’re doing it in a fragmented way that actually costs more and has worse outcomes,” Hawkins said.

For an additional investment of $15 billion over 10 years, Texas could draw down $100 billion in federal funding to insure two million more Texans through the state’s Medicaid program, according to a report by Billy Hamilton, a nonpartisan consultant who was previously the state’s chief revenue estimator.

The Texas Medical Association, which represents physicians across the state, announced on Saturday that it would support the Medicaid expansion if lawmakers can devise a way to give Texas “the flexibility to change the plan as our needs and circumstances change.”

“You have the two major entities that represent the delivery of health care in Texas saying this is something that we definitely need to look at,” said Dr. Carlos Cardenas, vice president of the TMA board of trustees, adding the organization recognizes “there are issues within the present Medicaid program and that the Legislature is in a position to come up with some reforms to shore up the system.”

Only 30 percent of Texas physicians currently accept new Medicaid patients, according to a TMA survey. Because of the limited provider network, existing troubles with access to care would be exacerbated if the state expanded Medicaid without reforms that increase the number of providers. Cardenas said lawmakers should consider raising provider reimbursement rates, reducing the red tape associated with managed care and modifying Medicaid fraud investigation tactics to attract additional providers to the program.

"I agree with the Texas Medical Association that there must be more flexibility and certain conditions met before we consider expanding Medicaid,” state Sen. Jane Nelson, R-Flower Mound, chairwoman of the Senate Health and Human Services Committee, said in an email. “We need to improve access to care and encourage more providers to participate in Medicaid, but expanding the program as directed by the Affordable Care Act is not a realistic option for Texas."

Perry, who has the power to veto an expansion plan approved by the Legislature, also reiterated in his state of the state address in January that Texas would not expand Medicaid. “Gov. Perry continues to believe that Medicaid is an unsustainable, broken program that needs to be reformed, and he does not support expanding it under Obamacare,” spokesman Josh Haven said in an email.

State Sen. Bob Deuell, R-Greenville, said many Republicans believe Texas would fare better if the state received a block grant from the federal government and designed a Medicaid program that fits the unique needs of state’s population.

“I don’t think [the trade associations are] looking at the long-term, broader picture that I, as a legislator, am looking at,” said Deuell, adding that pulling down $100 billion from the federal government “would be like borrowing money from your parents when they just went through a bankruptcy.”

As a primary care physician, Deuell said he understands firsthand the concerns doctors in TMA have about access to care. It’s often difficult for him to find specialists to refer his Medicaid patients to, he said. And he supports some of the reforms the TMA suggested, such as increasing provider reimbursement rates and ensuring the state’s Medicaid fraud investigations are conducted in a timely manner.

Although Democrats expressed concern that the TMA’s proposal for “flexibility” could be a vague way of suggesting a reduction in Medicaid services, they said the trade associations’ support for the expansion would help build public support.

“The more people and organizations that come on board, the more likely there is to be a strings-attached proposition for the Medicaid expansion,” said state Rep. Garnet Coleman, D-Houston. As a proponent of expanding Medicaid coverage, Coleman said he would accept some reforms offered by Republicans, such as co-pays for expansion enrollees. “It’s hard to turn down $100 billion, so the question is what can be agreed upon to accept the $100 billion. And we have not gotten there yet.”

To work around Perry’s veto power, state Sen. Rodney Ellis, D-Houston, has proposed a constitutional amendment that would allow Texas voters to decide whether to expand Medicaid.

“There is a lot of political posturing going on, but the bottom line is that it makes no sense to reject additional federal health aid,” Ellis said in an email. “I believe we do millions of Texans a disservice — at a real financial and human cost — if we dither and delay implementing this common sense reform.”