TribBlog: Health Care Reform Could Cost TX Only $4.5 Billion?

In an ironic twist, states that have done the least to bring low-income residents onto state Medicaid rolls — including Texas — stand to benefit the most from federal health care reform, according to a report released this morning by the Kaiser Commission on Medicaid and the Uninsured.

Texas officials have filed suit to prevent health care reform from taking effect. They've also predicted massive costs to the state, to the tune of $25 billion over the next decade. But the Kaiser study projects costs to the state that are just a fraction of what Texas officials have estimated. And it notes that Texas — partially because it has had low Medicaid eligibility for so long — will get more bang for its buck in the new system than almost any other state. 

Health care reform expands Medicaid access to nearly all individuals with incomes up to 133 percent of the federal poverty line (about $29,000 for a family of four). The Kaiser study estimates that Texas' population of uninsured adults will drop between 49 and 74 percent by 2019, depending on how aggressive the state is with its outreach. That means state Medicaid rolls will grow by between 1.4 million and 2 million people.

The financial burden will largely be borne by the federal government, the Kaiser study reports, covering more than 95 percent of Texas' costs. If Texas sees a 46 percent increase in Medicaid enrollment by 2019, the study notes, it will still only see state Medicaid spending grow by 3 percent. If it sees a more aggressive 64 percent increase in Medicaid enrollment, state spending will rise by 5 percent. That's a state cost, between 2014 and 2019, of anywhere between $2.6 billion and $4.5 billion, the report says — far below Texas' $25 billion estimate.

"There will be large increases in coverage and federal funding in exchange for a small increase in state spending," the report notes. "States with low coverage levels and high uninsured rates will see the largest increases in coverage and federal funding."