According to new data from the White House, hospitals in states that expanded Medicaid have saved billions of dollars. Hospitals in states like Texas that haven’t expanded Medicaid are losing out.
Prior to the Affordable Care Act (ACA), hospitals were footing the bill for about $50 billion each year in uncompensated care – hospital visits for which the bills never get paid. That’s about $1,000 per uninsured person. But now that the ACA has dramatically expanded health care coverage, and especially to low-income people, more medical bills are getting paid and uncompensated care costs are declining.
According to the White House data, hospitals will save $5.7 billion in uncompensated care costs this year because of the ACA. Hospitals in states that have expanded Medicaid are responsible for $4.2 billion of that amount. That’s almost three-fourths of the savings coming from only half of the states.
Texas is among the states that could significantly reduce its uncompensated care costs by expanding Medicaid, but will not be reaping the benefits because of Rick Perry and the Republican legislature’s unwillingness to do what’s right for the state. “By playing petty politics, Governor Perry and his party are jeopardizing the health of millions of Texans and costing our hospitals more money,” said Texas Democratic Party Chairman Gilberto Hinojosa. “Texas hospitals would not only be saving millions of dollars by allowing the expansion of Medicaid, but millions of Texans would also be insured.”
When confronted with the new data, Rick Perry’s office responded that expanding Medicaid “would cost Texas taxpayers nearly $9 billion over ten years, and would pull state tax dollars from other essential areas like education, public safety and infrastructure.” While it is true that the expansion would cost the state $9 billion, that $9 billion would leverage up to $100 billion in federal funds over the next ten years. And it would actually increase the state GDP by $10 billion over the next three years alone, so that in effect Texas would actually save money by expanding Medicaid. This is in addition to the close to 60,000 jobs that would be created. Plus Rick Perry hasn’t exactly protected education funding in the past.
We recently reported on how Texas is paying for other states to expand Medicaid, but seeing none of the benefits. Revenues from private insurance and Medicaid expansion were supposed to cover the costs of hospitals implementing the Affordable Care Act, but without the Medicaid expansion hospitals are on the hook for more. As a result, there are $34.3 billion in reimbursements for Texas hospitals that they now won’t see, adding insult to injury.
It’s reasons like these that are making more and more red state governors find ways to make Medicaid expansions work in their state. Pennsylvania recently gained approval for a modified Medicaid expansion proposal, becoming the ninth state with a Republican governor to expand Medicaid. Even Wyoming and Utah are trying to figure out ways to make it work. Until Rick Perry decides to join them, Texas will continue to lose out in almost every way possible.