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On Monday, Texas Governor Rick Perry rejected two major tenets of the Affordable Care act, saying the state would not participate in the individual state exchanges nor in the Medicaid expansion. What does this mean for a state with the highest rate of uninsured citizens -- a state that already rejected federal funds for the Medicaid Women's Health Program? Experts say the result will be escalating private insurance costs and declining public health.

Written by Andrea Grimes for RH Reality Check. This diary is cross-posted; commenters wishing to engage directly with the author should do so at the original post.

On Monday, Texas Governor Rick Perry publicly rejected two major tenets of the Affordable Care act, saying the state would not participate in the individual state exchanges nor in the federal Medicaid expansion. In a letter to U.S. Health and Human Services Secretary Kathleen Sebelius released yesterday, Perry wrote that the "Orwellian-named PPACA" would "make Texas a mere appendage of the federal government when it comes to health care."

Texas, which has the highest rate of uninsured people in the country -- about one in four Texans currently have no insurance -- could receive over a hundred million dollars from the federal government over the next few years, enabling the state to dramatically expand Medicaid overage to low-income adults who are not currently eligible. But, instead, Perry wrote that he believes the Medicaid expansion would "exacerbate the failure of the current system, and would threaten even Texas with financial ruin."

Texas is already in serious financial trouble, and Perry's dedication to rejecting any help, or dipping into state reserves, has put it in ever more dire straits. The state notably grappled with its multi-billion dollar budget shortfall during last year's legislative session; Perry has repeatedly refused to tap into the state's "Rainy Day Fund" to address the state's health and education needs, opting instead to cut public services. Perry also turned down millions in federal Medicaid funding for the Women's Health Program in order to exclude Planned Parenthood from participating in the program in Texas.

Perry's claims in the Sebelius letter are woefully misinformed, according to one public health policy expert at Houston's Rice University. Elena Marks, a Baker Institute Scholar in Health Policy at and former director of health and environmental policy for the City of Houston, says it's a "shame" that Perry can't see the good a state-run insurance exchange could do for Texas, because if Texas doesn't set up its own exchange, the ACA ensures the federal government will do it for the state instead.

"If the state doesn’t set it up, the Feds will," said Marks, "and that would be a shame for Texas." Instead of Texas experts on Texas soil deciding what the exchange would look like according to federal rules -- especially since, says Marks, federal "parameters still give you a lot of opportunity to tailor an exchange to meet the unique needs for yourself" -- the federal government will set up a one size fits all program.

"I’m sorry that we Texans who know the Texas population and health care needs and provider community the best will not be the ones designing the exchange and all the things that go with it," said Marks. As for the Medicaid expansion, she said it's simply good public policy to accept the federal money -- not least because of the 3.25 multiplier effect, which means that every dollar spent on Medicaid and CHIP "generates 3.25 times that amount in economic activity."

"Economically, as a matter of providing health care from a public health perspective, the Medicaid expansion makes complete sense," said Marks. It covers low-income people who can't afford insurance in the exchanges, for whom "the chance of being able to buy insurance under any kind of market condition is pretty much non-existent."

Do you put these people on Medicaid? Or, says Marks, "do you leave them uninsured?"

About 1.7 million more Texans could be eligible for Medicaid under the PPACA, which allows people with an income of up to 133 percent of the federal poverty line to participate. In Texas, people who would otherwise have gotten care at emergency rooms or county hospitals would be covered, resulting in an overall savings for the state. "The cost of their care doesn't get pushed away," said Marks, "It just gets shifted."

Fewer Texas doctors than ever are willing to take on new Medicaid patients, despite the growing demand. Also on Monday, the Texas Medical Association released a survey of 1,000 of its 46,000 members revealing that just 31 percent of its members are accepting new Medicaid patients; in 2010 that number was 42 percent, and in 2000, the number was 67 percent. As fewer doctors take on new Medicaid patients, the number of uninsured people in Texas continues to rise -- which means the cost of health insurance goes up to address that gap.

But according to the TMA's estimates, insured Texas families pay nearly 80 percent more than the national average in premiums to cover the cost of care for the uninsured.

Dan Stultz, the director of the Texas Hospital Association, expressed related concerns to the Texas Tribune, saying that that the expansion would mean fewer uninsured Texans "seeking care in emergency rooms, shifting costs to the privately-insured and increasing uncompensated care to health care providers."

The question that remains is whether Rick Perry will really stick to his guns on the ACA refusal in the future. Dr. Harold Pollack, at the University of Chicago's Center for Health Administration Studies, says he's skeptical of Perry's current claims.

"We really have to wait until after the election," said Pollack, because "there's a huge amount of posturing going on right now that needs to be taken with a little bit of a grain of salt." He called Perry a "polarizing figure" and that "a lot of his statements need to be read in that light."

Despite Perry's claims to the contrary, Pollack says he's "very confident that at sometime in the near future, that Texas will participate in the Medicaid expansion."

The reason? It's simply too good an offer for Texas to pass up. "If you smooth it out over time, it's a 90 percent federal match for services for a huge amount of low-income residents, but it's also for city and state governments, non-profits, health care agencies, hospitals," and the list goes on, said Pollack.

In the end, said Pollack, "Texas probably has the most to gain of any state."

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Comment Preferences

  •  I've asked numerous people. (2+ / 0-)
    Recommended by:
    BlackSheep1, Losty

      Yesterday, Burnt Orange posted a partial article on how this denial of funds would affect the 75% of Texans.
        Yes, I live here, but sadly do not know if this is true.  I have asked several progressive sites in TX for info - but as of yet no answer.

    Do you know?  

    http://www.burntorangereport.com/...

  •  It may depend on where you live (0+ / 0-)

    for some Texans who are in hospital districts with high volume, 'twill likely bring a property-tax increase.

    You know, the way we govern this state looks a little more insane every day ...

    LBJ & Lady Bird, Sully Sullenberger, Molly Ivins, Barbara Jordan, Ann Richards, Drew Brees: Texas is No Bush League! -7.50,-5.59

    by BlackSheep1 on Wed Jul 11, 2012 at 12:38:32 PM PDT

  •  The figures are about 2.5 million people in Texas (0+ / 0-)

    who are now out of the insurance market or in "junk insurance" hell, meaning they can buy a huge deductible worthless plan that skins them and drops them when they make a claim will be able to buy into a bonafide plan they are excluded from today.  Thanks to the ACA, known nowadays as "Obamacare".

    Unfortunately as many as 1.8 million other people who would be covered under Medicaid if the state were to go forward with the new rules will be denied that chance.

            It is a national scandal that existing Medicaid, the insurance for the very poorest Americans who are the below the poverty line is funded grudgingly by many states including Texas and costs the property owners, working stiffs about 40% of the dollar that it costs, the federal government picking up the other 60%. This formula is more generous in other states because those states see this population as especially vulnerable, underserved, and even a health risk  to other families if they are NOT covered by some decent plan. Texas, as do many other "red" states goes out of its way to avoid informing eligibles under the existing guidelines they could have their family be it 1 or a dozen on Medicaid. They purposefully do not inform the VULNERABLE AND POOR THEY ARE ELIGIBLE FOR MEDICAID.

    THERE IS EVEN A MOVE UNDERFOOT TO DO MORE DILIGENT CHECKING AND FIND EXCUSES SIMILAR TO WHAT PRIVATE INSURERS DO TO PUSH PEOPLE OUT OF COVERAGE OUT OF MEDICAID, EVEN THOSE eligible under current rules.

    This means that  setting up exchanges will be done by the Feds, but the shutting off of medicaid expansion will mean people finding out not only are there cheaper affordable plans but they might be eligible for Medicaid itself will mean little because Texas will refuse to enroll them. Republicans don't care that 25% of Texans cannot afford or even access affordable care. Or only do so at ridiculous excessive charges in a emergency or near emergency situation.

    All this at a time when the GREAT, SWAGGERING STATE OF TEXAS takes in 1 dollar and 9 cents, yes it takes public assistance from other poorer and similar states to finance its spending  for every dollar sent to Washington, DC. In spite of the wealth in the state, its natural resources, it advertises itself as needy and takes the money from others pretending it is poor.

    The irony is overwhelming.  Perry is just the biggest BS artist in the Texas Republican tribe of gangsters.

    This signature....is currently under construction..

    by BeeDeeS on Wed Jul 11, 2012 at 12:54:39 PM PDT

  •  Why not give TX the option (0+ / 0-)

    To totally opt out of all medicaid??? Not just as it relates to ACA??????

    If Perry hates it so much then lets cut off the million of republican voting poor people in TX that get it and see how they like it?

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