Expanding Medicaid has multiple gains for Texas

Posted Saturday, Mar. 02, 2013  comments  Print Reprints

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One after another, conservative governors have decided that the case for expanding Medicaid is overwhelming. They're right.

In Texas, Medicaid currently covers only very poor children and very poor adults who are elderly, have disabilities or are pregnant. Under the Affordable Care Act, Texas can expand Medicaid to cover more than a million adults living near and below poverty. Most are working, but in jobs without health insurance.

These Texans would be far better off covered by Medicaid. Medicaid provides greater access to healthcare and produces lower death rates, compared to being uninsured. (Medicaid also has lower per-enrollee costs than either Medicare or private insurance.)

The rest of us would also be better off if they had Medicaid. Expanded coverage would dramatically reduce the plague of uncompensated care. When low-income adults need healthcare, if they get it at all, it is paid for by local taxpayers or by higher charges leading to higher premiums for those who are insured. Even so, uncompensated care leaves the system struggling to provide care to any of us.

Expanding Medicaid would also help address our shortage of healthcare providers. With less uncompensated care, Texas would be a more attractive place to practice medicine, and Texas would have more resources to train and pay providers.

Expanding Medicaid would strengthen our system in other ways, too. For example, our mental health system would be more effective because the adults it serves would have greater access to mental healthcare and substance-abuse treatment. (Recent gun violence reminds us of the importance of mental healthcare.) Our criminal justice and child-protection systems would see substantial reductions in work and costs if we had a more effective mental health system.

Expanding Medicaid would infuse billions into our economy and create hundreds of thousands of new jobs. The federal government would cover 100 percent of the costs for the first three years, phasing down to 90 percent after that. Over the first four years, for $1.3 billion in state dollars, Texas would get $24 billion in federal dollars.

Texas may be able to offset most, if not all, of the cost of expansion by what it would save shifting other local and state costs to Medicaid. For example, our jails and prisons would see a big savings as Medicaid absorbed a significant portion of their medical costs.

If the federal government backs out of paying its share, the state can back out, too.

Nothing locks us into the expansion.

The federal government is also offering us flexibility in how we administer Medicaid.

For example, Texas might provide a lesser Medicaid benefit package for newly eligible adults. Or, Texas might offer targeted benefits to groups like those with mental health conditions or chronic illnesses like diabetes. Or, Texas could charge co-payments for the newly eligible and add some co-pays for those already eligible.

The federal government, however, isn't going to agree to a block grant, which essentially caps the amount of money Texas gets and turns the program over to the state. Neither is the federal government going to agree to expansion county-by-county or city-by-city, though a financing strategy that uses local contributions is possible.

The case for expanding Medicaid is indeed overwhelming. With the clock running on the legislative session, though, Texas must act urgently.

If Texas delays, we will lose the 100 percent federal financing, which is only available for the next three years. Delay also means leaving more than a million Texans struggling without health insurance and the rest of us coping with the consequences.

F. Scott McCown, a retired state district judge, is executive director of the Center for Public Policy Priorities in Austin.

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