TEXAS LEGISLATURE: Medicaid expansion debate is refueled

Perry stoic as coverage is still a big concern

AUSTIN, Texas - Oscar Juarez said the most he can do is hope his wife doesn’t get sick.

The El Paso resident said he has health insurance through work, and his children are covered, but his wife is not. They try to stay healthy and exercise, but there isn’t much else he can do.

“God knows if something happened to her ...” Juarez said, and he trailed off.

He spoke Wednesday away from the backdrop of politicians, social organizations and interfaith alliances chanting in the cold afternoon. They called out their positions on expanding Medicaid, health care for the poor.

Gov. Rick Perry has spoken out against expanding Medicaid as presented in President Barack Obama’s signature health care reform, the Patient Protection and Affordable Care Act.

Those at the Texas Capitol health care rally last week spoke of friends and family in dire need of medical care, or dying from lack of it.

“No” was not an answer they were taking.

Conservative and liberal politicians both believe the poor need help in the health care arena. They are considering general reforms in Medicaid, or, in a renewed push, expanding it.

The renewed push

The past week saw a reinvigorated debate on Medicaid expansion. Proponents claimed a victory when one-time opponent, Florida Gov. Rick Scott, a Republican, joined Republican governors who came out in favor of Medicaid expansion.

Lucy Nashed, a spokeswoman with Perry’s office said “the governor’s position has not changed — it would be irresponsible to add more Texans and dump more taxpayer dollars into an unsustainable system that is broken and already consumes a quarter of our budget.”

The prospect of leaving more than 6 million Texans uninsured has not persuaded many conservative politicians in Texas to buy into the crucial piece of Obama’s proposal.

Proponents argue that Medicaid expansion will not only provide insurance, but it also will be a boon to the economy, adding billions directly from the federal government, spurring job creation and decreasing emergency room visits, which the poor and uninsured often use as a substitute for the primary care they can’t afford.

“We’re hopeful that this outpouring of support for Medicaid expansion will really touch the heart of the governor and other state leaders,” State Rep. Rafael Anchia, D-Dallas, said at the interfaith rally. “It’s not only the right thing to do, it’s also the right thing to do for our state in terms of the economy.”

State Rep. John Zerwas, R-Richmond, who also is a physician, said he isn’t sure that the expansion will “gin up” the economy. The state will need to reform Medicaid, or put money in the state health care systems while still giving Texas flexibility in managing the funds, he said.

In the summer of 2012, Perry flatly opposed the Medicaid expansion, and the governor wields a veto power that he hasn’t been afraid to use.

“The governor has positioned us to be opposed to expansion, and I think that’s the right position to be in,” Zerwas said. “We know the Medicaid program is not sustainable for a number of reasons. One, the cost keeps going straight up, more so than our tax revenue does. And we see the provider network become more and more limited as a result of the program not being able to attract providers to stay in it. I worry about putting a million-plus people in the program without any change in the way we do the program.”

Beginning in 2014, Medicaid could expand to parents and childless adults under age 65 whose incomes are below 133 percent of the federal poverty level. In Texas, Medicaid now is generally limited to “low-income children, seniors, the disabled, and pregnant women, and more than two-thirds of Texas Medicaid recipients are children,” according to a report from the nonpartisan House Research Organization, which analyzes legislation for House members. If states expand then “from 2014 to 2016 the federal government would cover 100 percent of the Medicaid costs of newly eligible persons. This would drop to 90 percent by 2020. States would be responsible for the administrative costs of the expansion. There is no deadline for states to decide whether and when to expand Medicaid, and states that expand the program can later reverse that decision,” the HRO report states.

Rep. Drew Darby, R-San Angelo, and Rep. Susan King, R-Abilene, have expressed doubts that the federal government will be able to uphold its promise to cover the program at those levels.

Zerwas said he wasn’t aware of any precedent of the federal government going back on a promise of that sort, but he said he could see it happening given the federal government’s enormous debt and spending issues.

States such as Arizona have planned for Medicaid expansion with the provision that it can opt out if federal funding drops below certain levels.

Organizations such as Texas Impact, an inter- religious organization aimed at social concerns, put out a release Monday saying Texas could provide health care coverage to “2 million of its citizens. The federal government would pay about $100 billion toward this expansion over 10 years, with the state responsible for only about $15 billion under a moderate enrollment scenario.”

That organization, in connection with Methodist Healthcare Ministries of South Texas, had already furnished a report from Billy Hamilton, a consultant in fiscal policy and former chief deputy comptroller for Texas.

The January report states that “the expansion will boost Texas economic output by $67.9 billion during fiscal 2014-17 as the direct and indirect impacts of this new spending recirculate through the state’s economy. As the expansion phases in, this economic impact increases from $6.7 billion in fiscal 2014 to $22.8 billion in fiscal 2017.”

The right-leaning Texas Public Policy Foundation shot back with a statement from its executive director Arlene Wohlgemuth:

“Underlying the numbers in the report is the assumption that forcing more low-income people into Medicaid will significantly reduce the amount Texas hospitals must spend on unreimbursed charity care for the uninsured.

“However, a significant portion of uncompensated care costs come from Medicaid enrollees themselves, who often seek care in hospital emergency rooms because they do not have adequate access to primary care. Texas Hospitals are underpaid by Medicaid, and charge private insurance more to make up for it. Expanding Medicaid will only exacerbate this problem while doing nothing to address the fundamental flaws in the program.”

Even so, county officials in Austin and Dallas counties have called for Medicaid expansion, as has the Texas Medical Association, which represents doctors.

The terms of the Affordable Care Act have cut Medicare and Medicaid compensation to hospitals, but in return hospitals are expecting to absorb less uncompensated care costs because there will be fewer uninsured people seeking treatment. The Texas Hospital Association says hospitals could, for example, lose $13 billion in reduced Medicare payments alone over the next 10 years. To fund the Patient Protection and Affordable Care Act, hospitals agreed to the cuts in Medicaid and Medicare rates, under the assumption the losses would be recouped by the Medicaid expansion and an increased volume of paid patient care and reduced charity and uncompensated care, the release states.

“While the legislative session has prompted some leaders to discuss politically risky alternatives that will take many years to implement — if at all,” THA President Dan Stultz said, “the high stakes currently threatening Texas make bypassing Medicaid expansion a costly error in how hospitals are treated and are able to treat patients.”

Where to now

Democratic lawmakers already have bills in the system ready to expand Medicaid and to do it by appealing to Republican sensibilities about the economy.

State Rep. Lon Burnam, D-Fort Worth, has one bill that would mimic one from Arizona Republican Gov. Jan Brewer’s plan, one that would protect Texas from the possibility that the federal government would decrease funding, according to a release from Burnam during the Medicaid expansion rally.

“This isn’t a Democratic issue or a Republican issue; this is a simple numbers issue,” Burnam said in the release, referring to the money Texas stands to receive.

Rep. Garnet Coleman, D-Houston, and Sen. Rodney Ellis, D-Houston, have filed a resolution proposing a constitutional amendment that would leave it to the Texas voters to decide whether to expand Medicaid.

Conservative lawmakers, however, hope for a block grant for Medicaid expansion that would give Texas flexibility in covering those in need.

The Texas Medical Association, which on its website claims to speak for 46,000 physicians and medical students, called for Medicaid reform, saying, the “system is broken.” TMA President-elect Stephen Brotherton and others in the statement asked that lawmakers “look beyond the federal government expansion solution and design a solution that works for Texas and for Texans. ... Texas physicians share both the taxpayer concerns of our state leaders as well as the very realistic medical care concerns of our state’s uninsured population.”