Analysts: Texas loses big by rejecting Medicaid expansion - Brownsville Herald: Local News

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Analysts: Texas loses big by rejecting Medicaid expansion

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Posted: Saturday, June 8, 2013 9:47 pm

From the perspective of community health leaders in Cameron County, the state’s refusal to participate in Medicaid expansion under the Affordable Care Act means passing up a golden opportunity to widen health insurance access to the most vulnerable members of the population.

According to an analysis from the nonpartisan Center for Public Policy Priorities, Cameron County would be able to reduce its population of uninsured residents from 27.8 percent to 13.7 percent if Texas participated in Medicaid expansion. Cameron County has nearly 113,000 uninsured residents out of a total population of more than 415,000.

Statewide, nearly 1.5 million additional Texans living below the poverty line would have insurance by 2017 under expansion, according to the Texas Health and Human Services Commission.

The county will also miss out on more than $198 million in new Medicaid funds each year through 2017, according to the CPPP report. That’s enough money to support 1,089 primary care physicians and 2,936 registered nurses in the county each year, according to the report.

Statewide, Texas will forfeit an estimated $100 billion in federal Medicaid funds by rejecting Medicaid expansion.

The economic advantages of participating in Medicaid expansion are profound, according to a study by the Perryman Group, a Waco-based economic and financial analysis firm. While the cost to the state general fund of making almost 1.5 million more residents eligible for Medicaid is estimated at $1.3 billion through fiscal year 2017, Texas would be eligible for an estimated $24 billion under Medicaid expansion, according to the study.

The federal government would pay 100 percent of the cost of Medicaid expansion from 2014 to 2016 then ratchet its share down gradually to 90 percent by 2020, where it would level off going forward, according to the Perryman Group.

It means that for every $1 the state pays for Medicaid, the federal government pays $9. Perryman estimates that during the first 10 years of the program (the current Medicaid program plus expansion) the federal government would increase payments to the Texas health care system by nearly $90 billion, while the state’s share would be $15.6 billion.

Currently, the federal government pays 57 percent of the cost of Medicaid, a federal-state program for the poor, elderly and disabled.

Conversely, not participating in expansion means Texas will suffer “a significant economic downside which must be weighed against potential savings in direct State outlays,” according to the report. A large uninsured population leads to higher private insurance premiums and higher taxes to cover the cost of uncompensated care, Perryman says.

On the other hand, more spending on health care creates economic stimulus and makes for a healthier population, fewer deaths and increased productivity, according to the study.

A new study by the nonprofit RAND Corporation’s health policy research division, the largest in the nation, concluded that Texas and 13 other states whose governors have vowed to reject expansion, will end up paying significantly more for uncompensated care than states that do expand Medicaid.

“Our analysis shows it’s in the best interests of states to expand Medicaid under the terms of the federal Affordable Care Act,” lead author Carter Price said.

A Supreme Court ruling last year upheld the constitutionality of most major provisions of the ACA, or Obamacare, but left it up to individual states to decide whether to participate in Medicaid expansion.

Gov. Rick Perry has steadfastly rejected expansion for Texas, arguing that it would only mean putting more Texans into a “broken system.” In a letter last year to Health and Human Services Secretary Kathleen Sebelius, he called Obamacare’s provisions “brazen intrusions into the sovereignty of our state.”

Elena Marin, pediatrician and CEO with of Harlingen-based Su Clinica Familiar, said the state’s refusal to expand Medicaid is “extremely disappointing.”

“All Texans deserve to have access to an affordable medical home where they can receive primary and preventive health care services,” she said.

“People most in need will not have that access unless our legislators collaborate and find a solution. Financial models have shown that the expansion can pay for itself, and, with further improvement in accountability and efficiencies, even more so.”

Lance Lunsford, spokesman for the Texas Hospital Association, said it wasn’t Perry’s resistance to expansion so much as the fact that members of the House were adamantly against it.

Lawmakers also snuffed out an attempt by Rep. John Zerwas, R-Simonton, to pass the “Texas solution” in the form of HB 3791, an alternative to Medicaid expansion that would require a federal block for the state to essentially create its own Medicaid program.

The bill also left open the option of tapping into ACA-funded Medicaid expansion money to help low-income residents buy private insurance. The whiff of Obamacare contained in the legislation doomed it, Lunsford said.

“That completely made it moot  however Gov. Perry stood on it,” he said. “Right now we’re looking at what paths forward we might have. They are limited, remote — if not impossible.”

Lunsford understands legislators’ distrust of ACA but said it doesn’t change the fact that a quarter of Texas’ population is uninsured — nearly 30 percent in the Rio Grande Valley.

“There’s no political cost to saying you’re against additional federal spending,” he said. “Where the problem lies is, you’re sent to the Legislature to develop solutions.”

Without some type of insurance expansion for the state’s poorest, hospital emergency rooms will continue to be overwhelmed by uninsured patients who don’t go to the doctor unless it’s at the ER, he said. This drives up health care costs and insurance premiums for everyone else, Lunsford noted.

Paula Gomez, executive director of the Brownsville Community Health Center, said her clinic treats a little more than 20,000 patients a year. Between that and Su Clinica’s Brownsville clinic, she estimates only 15 percent of the actual need is being met in the city.

“People are waiting till their illness gets to the point where they end up in the emergency room, and at that point we pay for it anyway because they still don’t have ability to pay,” she said.

“These are working poor. If they’re really sick they’re not going to be able to work. If you can’t work, you can’t produce. If you can’t produce, you can’t make money. If can’t make money, you can’t provide for your family. It hurts all the way around.”

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