There Must be a Good Reason Why our State’s Elected Leaders Oppose Medicaid Expansion


txcap Flickr/Ed Schipul
By Arthur Garson, Jr., MD, MPH, MACC, Director, TMC Health Policy Institute and Stephen H. Linder, PhD, Associate Director, TMC Health Policy Institute | July 19, 2016

Our elected leaders in Texas are smart, savvy, and after all, they got elected.  So there must be a good reason to oppose Medicaid expansion.  Here are a few that we have heard coming from Austin.

  1. These people don’t need health insurance; they get all the care they need in the Emergency Room The uninsured are 25% more likely to die as the insured, in the age group 19-64 – who would be the ones largely helped by expanding Medicaid coverage. In fact, one in every four uninsured people gets care in the ER. But ERs are surely not the best place to get preventive or ongoing care. About half of uninsured adults have a chronic disease like cancer, heart disease or diabetes. More than half of uninsured diabetics go without needed medical care; those with breast and colon cancer have a 35 percent to 50 percent higher chance of dying from their disease; and they are three times more likely to postpone needed care for pregnancy. The ER just isn’t the right place for chronic disease prevention or follow-up.
  2. If they would just get a job, they wouldn’t need Medicaid. It may surprise you: 2/3 of the uninsured work; Texas has twice the percentage of full-time workers as the US average. But still we have the highest rate of uninsured in the country. How can this be? Texas is in the top 3 states for numbers of small businesses – 85,000 employers with <10 employees in Houston alone. Because of high insurance premiums, only 50% of small businesses even offer health insurance. Now consider being an individual – in Houston a 51-year-old nonsmoker at 200 percent of the Federal Poverty Level making $23,000 a year (less than $12 per hour for a full-time worker) can purchase a subsidized “silver” plan in the insurance marketplace with an out-of-pocket maximum of $5,000 for about $1,400 a year. Theoretically, the maximum financial exposure for this individual would be $6,400 annually, or about 28 percent of income. How much of one’s income is “reasonable” to spend for health care? Consider the following median numbers for a person making $23,000 per year: Housing $9000, Car insurance $540, Gas (car) $2040, Groceries $4680, Child care $3600, Clothing $1700 = $21,560.  This leaves $1440 for everything else.  Even if all this (6.2% of income) is spent on health care, it doesn’t come close to the $6400 needed for health insurance. Good thing these state elected leaders are state employees with health insurance.
  3. Don’t throw good money after bad: Medicaid is broken. Most Medicaid coverage is provided through private insurance plans, including some non-profit ones, who operate managed care programs. Government only finances the coverage: these programs are far cheaper per enrollee than their fee-for-service private competitors, and their administrative overhead is lower.  Further, Medicaid coverage is more comprehensive than any of the private plans available in the insurance marketplace.   What’s “broken” is that Medicaid in Texas doesn’t pay enough — 59% of Medicare. Physicians and other practitioners are supposed to be able to “get along” on the amount Medicare pays – not 59% of that.  No wonder some physicians don’t see Medicaid patients.  The “fix” is actually in the hands of the leaders: they could press for ways to make Medicaid more efficient and thereby free up funds to improve physician payment; this is not whining for more money – it is a reality that with higher payment (closer to what Medicare pays), more physicians will see Medicaid patients.
  4. Medicaid expansion will ruin the Texas economy. In 2017, the first year requiring states to contribute 5%, the estimated federal contribution to Texas is approximately $9.2 billion and the State contribution is $1.5 billion. Translated, this will insure about 1 million Texans, at a rate of $1,500 per recipient per year. That is about one-third of the private insurance rate.  While the $1,500 per recipient, per year is a favorable rate, the State will still be required to use General Revenue dollars every year, and then twice that amount in 2020.  This requirement may be the most difficult to achieve; however, there are clear efficiencies in health care that can be achieved.   The $1.5 billion cost represents 5.1% of the Texas Medicaid budget.  Where can this come from? Over the next several years, doctors will be paid differently – with payment based on quality. Some researchers believe a reasonable range of savings is between 20% and 46% — surely a lot more than 5%.  “Oh, they say, “but the Feds will decrease the percentage they will pay the states for Medicaid.” That has not happened since the rates were set in 1965.
  5. No viable Texas plan has been put on the table – it must be paid with a block grant – and Washington won’t agree to that. In fact, several similar plans were proposed. Here are the principles of one we are familiar with, that had buy-in from Washington: 1. All residents of Texas should have access to affordable, basic health care coverage. 2. The funding from the federal government will be in the form of a set amount per beneficiary (e.g. capitation) for those newly covered. The capitation payment to the state per person will increase yearly by a negotiated amount. This could be considered as a block grant. Newly eligible Texans, those currently not eligible for Medicaid, will have premium assistance to buy commercial, private insurance plans using new federal dollars. 4. These private insurance plans should have low cost-sharing, but every individual and family will contribute financially to their own care. For those who are unemployed, a job training and assistance program is mandatory for adults to receive benefits. 5. The benefits should be comparable to other qualified health plans. 6. A “circuit breaker” could be used: Texas will have the right to withdraw if the incremental expenses to the state are not offset by federal revenue and efficiencies recognized by the state. Guess we have different views of the word “viable.”
  6. We don’t want to give Obama anything. Maybe ask the husband whose wife is dying of previously unrecognized colon cancer if she is worried about giving Obama anything. Can our leaders really look this couple in the eye? Politics is supposed to serve the people, right? In editorials last year and this year, the Houston Chronicle has been clear: “It’s astounding to us how elected officials can be so hidebound by ideology that they lag behind their fellow Texans on a number of issues, including Medicaid expansion. They stick to their stunted position, regardless of the fact that no other state has more uninsured than Texas.” (Houston Chronicle, April 29, 2015)
  7. The voters don’t want Medicaid expansion. The Texas Medical Center Health Policy Institute and Nielsen just reported the Second Annual Consumer Health Report, including a random sample of 1000 people from Texas; 63% of Texans were in favor of Medicaid expansion; compared to last year, 50% more Texans were in favor of Medicaid expansion. One editorial writer headlined, “Turning Texas Blue: Large Majority Support Medicaid Expansion.” This year, 67% of Texans said they would vote for a candidate with similar views (Republicans 50% and Democrats 84%). Of course, the state leaders will say that we didn’t ask their Again from the Houston Chronicle Editorial Board (April 29, 2015): “Our elected leaders ignore the business community, the medical community, the working poor, religious groups, social service organizations — all of whom recognize the obvious advantages of expanding Medicaid. Surely their recalcitrance will come back to haunt them some day.”Every one of these reasons has been raised in public forums by our Texas leaders.Maybe there is a good one that they are keeping to themselves?

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