The Federal Government May Force Texas’s Hand on Medicaid Expansion

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Rick Perry and Texas Republicans have delighted in refusing to expand Medicaid under the Affordable Care Act. So far the repercussions have primarily fallen on the over 1 million people who have been left uninsured as a result – not on the politicians who left them that way. That may soon be changing.

Texas has benefited from a Medicaid waiver it received in 2011 that brought $29 billion into the state to help hospitals cover the costs of caring for the uninsured. In 2016 Texas will have to ask the Centers for Medicaid and Medicare Services to renew the waiver, but this time there may be strings attached.

According to the Texas Tribune, “with the waiver renewal nigh, observers said, there’s some expectation that the federal agency will hold the waiver approval hostage in exchange for Medicaid expansion.”

Put more bluntly: “CMS is going to hold that over Texas’s head to say, ‘You want this money? You do the expansion,’” according to Matt Salo, executive director of the National Association of Medicaid Directors.

Texas may have had more of an excuse for its high uncompensated care costs in 2011. Now that it chose to leave 1 million people stuck in the Medicaid coverage gap, Texas will be hard pressed to get sympathy from the feds. And that means Texas Republicans may have to do the unthinkable unless they want an important source of funds for the state to get shut off. While it’s one thing to turn down a 9:1 federal match, it’s quite another to give up billions of dollars the state is already receiving.

Florida, which also refused to expand Medicaid, already found out the hard way that its usual three-year Medicaid waiver would only be renewed for one. Texas could be in a similar position, and really can’t afford it.

Even before Texas runs up against the expiration of its current waiver, there will be more pressure to expand Medicaid. Just yesterday, the Perry-appointed Texas Institute of Health Care Quality and Efficiency recommended that the state negotiate a Texas-specific expansion of health care coverage for the poor, adding that Texas’s uninsured rate is “unacceptable.” That’s because there’s really no way to make any recommendations on health care coverage in Texas without arguing there needs to be more of it, and a Medicaid expansion is the most cost-effective way to have an enormous impact.

There is also mounting pressure from hospitals, who are footing the bill for uncompensated care, those who wish the state had the $10 billion that expanding Medicaid would have saved, and the even the Texas Republicans who have started warming to a Medicaid expansion.

Other red states have found ways to expand Medicaid that don’t require them to embrace Obamacare but still allow them to insure the people who need it most. Texas should be able to figure out a way forward too.

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About Author

Emily Cadik

Emily is a Texas ex-pat and proud Longhorn living in Washington, DC, where she remains connected to the Lone Star State through her work on BOR and her enthusiasm for breakfast tacos. She works on affordable housing policy, and writes about health care, poverty and other social justice issues.

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