Reluctance to Expansion of Health Care in Texas Has a Familiar Ring

The wrangling over whether and how to expand Medicaid in Texas rings a bell.

Proponents are emphasizing what it might do for the state’s gigantic uninsured population. Opponents stress the dangers of a new federal entitlement program. A governor who might or might not have future political plans in mind is opposed.

Go back to 1997. The federal government offered to send piles of money to states to start a new health care and insurance program. In Texas, a majority of the state’s officeholders and lawmakers were skeptical, worried about creating new entitlements and wary of creating a program that started with attractive federal enticements but could end up draining the state budget.

The governor was George W. Bush, and the lieutenant governor was Democrat Bob Bullock, about to be succeeded by Rick Perry, a Republican like Bush. The speaker of the House was Pete Laney, a Democrat, and the federal idea on the table was called the Children’s Health Insurance Program, or CHIP.

One side saw free money that could be put to immediate good. The other saw a mouse trap under all that cheese.

Texas stalled, waiting two years to get in, forfeiting federal matching funds that went instead to other states, but it finally got in. CHIP remains a major component of the state’s safety net.

That is not a prediction of what might happen this time. Republicans are fully in charge now, and the vociferous opposition to expanding Medicaid is coming from the top. Bush was relatively quiet. Perry is not.

The differences between the programs, and the amounts of money involved, are enormous. CHIP was a stand-alone program on a much smaller scale. The expansion to the complex Medicaid program is a key part of President Obama’s federal health care law and would bring an estimated $100 billion into Texas over 10 years at a cost of $15 billion to the state budget.

Republican leaders — Perry, Lt. Gov. David Dewhurst and U.S. Sens. John Cornyn and Ted Cruz among them — held a news conference this week to restate their opposition to expansion. They fear the strings attached to the money. They don’t want to create new entitlements. And, they said, they don’t want to expand a Medicaid program they believe is broken. They would like to operate Medicaid under state rules, with federal money coming in the form of a grant without prescriptive instructions.

CHIP, loosely speaking, operates as a federal block grant used by the state to provide health care for children.

One concern about CHIP involved Medicaid, too. Several states created their child health programs by adding children to existing Medicaid programs, which had two advantages. It was a fast way to put a program in place, and the program rules required states to sort applicants, putting eligible ones in the Medicaid program and the remainder on CHIP.

Texas conservatives pushed hard against a direct expansion of Medicaid and argued, unsuccessfully, that spillover beneficiaries — the CHIP applicants who qualified for Medicaid — would raise the cost of that older and “broken” program.

Democrats like San Antonio’s Castro twins, who traveled to Austin to counter the Republican news conference, like to point out that Medicaid is run by the state and that state leaders ought to fix the parts they think are broken. For example, Joaquin Castro, the congressman, and Julián Castro, the mayor of San Antonio, said the state is causing one of Medicaid’s problems itself by paying low reimbursement rates for Medicaid providers.

The governor and others complain, meanwhile, that too few providers are willing to take part in the program.

Democrats and some Republicans are trying to sell Perry on expansion, and legislation that would allow that remains alive. The governor has warmed to part of the federal health care law, posting a legislator’s video on the salubrious effects of health insurance exchanges two years after vetoing a Texas version. Some of his fellow Republican governors have warmed to Medicaid expansion, as Bush was able to do in 1999 when lawmakers finally persuaded him to sign the CHIP legislation.

That took two years, and didn’t require the governor to do a political somersault to change his position, as Perry would have to do.

The state is not moving any faster this time.

[Editor's note: An earlier version of this column said Perry was lieutenant governor in 1997; he was elected to that post in 1998 and sworn in at the beginning of 1999.]