Texas Asks Feds for Short-Term Medicaid Funds

State health officials confirmed Tuesday they have asked the Obama administration to keep a 15-month lifeline of federal Medicaid money flowing into Texas to help hospitals treat uninsured patients.

That money would offer temporary relief to health care providers who face losing the funds — some $3.1 billion annually — over state leaders' refusal to provide government-subsidized health coverage to low-income adults under the Affordable Care Act, President Obama's signature health law.

Federal officials previously signaled they would stop footing the bill for at least some of Texas’ costs for "uncompensated care" — the burden on hospitals when patients can't pay for their visits. Under the Affordable Care Act, Texas was encouraged to expand its Medicaid program to cover nearly 1 million additional adults living in poverty — a move that would have given more poor patients a means to pay for care. The state’s Republican leadership has vehemently opposed that option, criticizing Medicaid as an inefficient government program.

In a letter dated April 7 and first released to The Texas Tribune on Tuesday, Texas health officials asked the federal government to continue the funding for uncompensated care for one year and to pony up an unspecified prorated amount for an additional three months. It is unclear if the Centers for Medicare and Medicaid Services, which oversee those federal funds, will approve the state's request.

If approved, the funding would briefly extend the life of what was supposed to be a temporary program that safety-net hospitals have relied on for five years to serve poor, uninsured Texans.

The program, known as the 1115 waiver, was originally intended to help Texas expand its privatized health insurance system for Medicaid patients and to cover spiraling uncompensated care costs borne by hospitals.

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First created as a $29 billion pot of money paid to Texas health care providers over five years, about 40 percent of that money came from local funds — mostly property tax dollars — and 60 percent from the federal government. The Obama administration approved the program in 2011, and it was set to expire in September.

By asking for the program to be renewed for a significantly shorter timeframe, state health officials indicated that they expect the federal government will be reluctant to continue handing out cash to reimburse hospitals for patients who can't pay for their visits. Federal health officials have repeatedly told state leaders they have no desire to use waiver funds to pay for costs that would otherwise be covered by a Medicaid expansion.

In Florida, the Obama administration recently agreed to extend a similar source of hospital funding in that state, but only for two years and at a significantly reduced rate. That arrangement diminished the state’s low-income pool by about 50 percent for the first year and 70 percent for the second.