ACA Medicaid Coverage Opportunity Best Deal for Texas Taxpayers

/, Health Insurance and Reform, Medicaid & CHIP/ACA Medicaid Coverage Opportunity Best Deal for Texas Taxpayers

Texans aren’t the only ones thinking about the great fiscal deal the now-optional ACA Medicaid expansion would be for our state.  The Atlantic’s Jordan Weissman blogged last week, using Texas to illustrate the huge expansion of coverage and bargain price tag the opportunity offers.

If you have read CPPP’s county-level fact ACA fact sheets, then you know Texas Medicaid officials predict we would spend $1.3 billion from 2014-2017, and gain $25.3 billion in federal dollars to cover over a million low-income adults (parents of the 2.6 million kids now covered in Texas Medicaid, plus other poor adults without children at home).  Texas officials also say over 400,000 already-eligible but now-uninsured children will also sign up for Medicaid during those years, costing the state another $1.8 billion because the federal match for them is at the lower “regular” Texas Medicaid match rate, where we pay about 39 cents on dollar.  Weissman comments on a new 50-state report from the Kaiser Foundation, with numbers that don’t precisely match but are very much in line with the HHSC predictions.

Here the story takes a surprising twist.  Both national experts and Texas HHSC say that a large part—maybe even ALL—of the “welcome mat” surge in children who sign up for Medicaid when the big ACA coverage expansions start in 2014 will sign up whether or not a state allows the Medicaid expansion for adults!  While most experts agree that kids’ sign-up will be largest if the whole family can enroll, the welcome mat research is strong enough that Texas Medicaid officials built the increase in children into their budget for 2014-2015, even though they do not assume the adult coverage expansion or ask for any funds for those adults.

So the KFF focus is this:  states will get these new Medicaid kids anyway, but if the state also accepts the adult expansion it can cover well over a million uninsured at a lower per-capita cost.  Why?  Mainly the over nine-to-one federal dollar match for the adults—with zero state costs for 3 years and a maximum 10% share starting 2020—a much better deal than the current 39%.  But in Texas we will also see savings in locally-funded uncompensated care for hospitals, reduced local and state mental health spending, reduced criminal justice costs, and higher insurance premium tax and drug manufacturer rebate revenues for the state.

Key to understanding this argument is the fact that very few if any other states will pass on this opportunity, and Texans will not get a break on our federal taxes if our lawmakers stop these federal funds from coming to our communities.  As Weissman says, even lawmakers who don’t much believe in government’s role in access to affordable care or building a strong safety net might still believe “in retrieving as much of their citizens’ tax dollars as they can.”

At the Center for Public Policy Priorities, we believe in a Texas that offers everyone the chance to compete and succeed in life. We envision a Texas where everyone is healthy, well-educated, and financially secure. We want the best Texas - a proud state that sets the bar nationally by expanding opportunity for all. CPPP is an independent public policy organization that uses data and analysis to advocate for solutions that enable Texans of all backgrounds to reach their full potential. We dare Texas to be the best state for hard-working people and their families.

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