Texas is Paying Billions for Other States' Medicaid Expansion, But Seeing None of the Benefits

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Expanding Medicaid is one of the key provisions of the Affordable Care Act, but thanks to Rick Perry, it’s not being done in Texas. We’ve written extensively about the deleterious effects of refusing to expand Medicaid, from the 1 million people left behind in the Medicaid coverage gap to the billions of dollars we’re losing as a result of Rick Perry’s decision.

Now, there’s another one to add to the list. A new report from the Urban Institute found that Texas will pay over $36.2 billion dollars to expand other states’ Medicaid, while we’re losing out on $65.6 billion of federal funding for our own Medicaid program.

Texas hospitals are going to be hardest hit by the loss of these federal funds. The additional $65.6 billion of federal Medicaid money would have generated $34.3 billion in additional hospital reimbursements–but hospitals will see none of that money, thanks to Rick Perry.

The Urban Institute study also found that Medicaid expansion is a sound investment for those states who are choosing to do it. For each dollar a state invests in Medicaid expansion, $13.41 in federal funding is flowing back to the states that are expanding Medicaid. Plus, those states are seeing increased revenues and savings that far exceed the cost of expanding their Medicaid programs.

The problem for Texas hospitals lies in the fact that the initial expectation when the Affordable Care Act was passed was that increased revenues from private insurance and Medicaid expansion would offset the costs that hospitals had to pay to implement the law. In Texas, that offset is much smaller, since we’re not getting any money to expand Medicaid. That leaves hospitals on the hook for much more money than anticipated.

Meanwhile, Texas tax dollars will go toward covering a portion of other states’ Medicaid expansion, while millions of low-income Texans remain uninsured at home.

Unfortunately for Texans, Rick Perry is not likely to change his mind about expanding Medicaid anytime soon since he’s more focused on his next presidential campaign than on serving the needs of Texans. Greg Abbott has also promised not to expand Medicaid if he became governor, even in the face of the billions of dollars it’s costing Texans. According to the Dallas Morning News, many doubt a Republican-controlled Texas Legislature “will seriously consider Medicaid expansion until after Obama leaves the White House in early 2017.”

With a million uninsured and billions of dollars of funding lost, Texas Republicans’ commitment to sticking it to President Obama is proving to be one of their costliest decisions yet.

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About Author

Katie Singh

Katie grew up in Austin and has been involved in Texas politics since 2004. She has been a part of several campaigns, from state house races to working at President Obama's campaign headquarters in 2012. She loves public policy, public health, and tacos. Katie tweets from @kasingh19.

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