Opinions differ among local legislators and health facilities
The national health care overhaul known as the Affordable Care Act has been a topic of contention in Texas since it was originally proposed by President Barack Obama. One of the most significant adjustments comes January 2014 when Medicaid will be expanded to include roughly 17 million more people nationwide.
In Tomball and Magnolia, local legislators have come out against the act, but some area Medicaid-funded facilities think it would be unwise to turn down the federal dollars.
“Medicaid funds about 75 percent of all our services,” said Kathi Schmidt, executive director of Reach Unlimited, which provides services for the mentally and developmentally disabled. “This would open up funding for a lot of the folks in our community who are on the waiting list for services. There are folks who have been waiting for over 10 years.”
The Supreme Court ruled in July that each state has the power to reject the Medicaid expansion without paying a penalty. Texas Gov. Rick Perry said he has no plans to adopt the act as a law in Texas, saying it would not result in better patient protection or more affordable care.
The fate of Medicaid expansion in Texas will be determined in part by state legislators in the 2013 legislative session. Representatives like Allen Fletcher, R-Tomball, and Debbie Riddle, R–Houston, said they believe the cost of expanding Medicaid cannot be sustained at a state level.
“Even though the federal government pays the cost early on, the expansion still ends up putting a serious strain on the state budget over time,” Fletcher said.
In Harris County, 23 percent of the population is uninsured, according to the Center for Public Policy Priorities. In Montgomery County, 19 percent is uninsured. CPPP projects the expansion to lower those rates to 14 percent and 9 percent respectively.
Medicaid is an entitlement program meant to help low income individuals and families pay for health care. As of now, 61 percent of funding comes from the federal government and 39 percent comes from states.
The ACA lowers requirements for someone to qualify for Medicaid; once the law goes into effect, everyone with an income less than 133 percent of the federal poverty level will qualify.
The costs of the Medicaid expansion through the Affordable Care Act are covered entirely by the federal government through the first three years. State governments start paying a five percent share of the price in 2017, which increases to 10 percent by 2020.
From 2013–22, the Kaiser Family Foundation estimates the Medicaid expansion would cost the federal government around $78 billion, while Texas would end up paying around $10 billion.
Since money to fund the Medicaid expansion would eventually start coming from state budgets, it is essentially funded by taxpayers. However, individuals are not expected to shoulder any of the actual costs related to the program. Joanne Ducharme, executive director with the Montgomery County Community Development Department, said the full impact of such a wide-scale expansion on premium costs remains to be seen.
“The theory is that more healthy people will be signing on and that it’s not going to have that big of an impact,” she said. “But generally, very low income people are not as healthy for a number of reasons such as lack of nutritional education or just the environment that they live in.”
The Medicaid expansion is not likely to have a huge impact on the number of patients hospitals have to treat, said Olivia Dear, executive director with the Harris County Healthcare Alliance.
“People are going to the hospital whether they are covered or not,” she said. “It’s just how the hospital is compensated that is going to change.”
As previously uninsured people enroll on Medicaid, practices that accept Medicaid could grow, Dear said. Physicians are compensated more for treating patients on Medicaid than for treating the uninsured.
Dear said the Healthcare Alliance does not support or reject the proposed Medicaid expansion, but it is prepared to help no matter what the outcome is.
Nancy Wood, administrator with Park Manor—a Medicaid funded nursing home in Tomball, said the state’s Medicaid program is already underfunded.
“The reimbursement rate we receive does not equal what the state says it should be paying,” she said. “If we aren’t properly compensated, more people applying for Medicaid would just expand the debt we’re absorbing.”
What happens next
Perry is one of several state governors who plans to reject the Medicaid money from the federal government through the Affordable Care Act. Governors in South Carolina, Louisiana, Florida and Mississippi have made similar claims.
Leading into the 2013 state legislative session, representatives have been working to figure out what the best course of action is for Texas moving forward.
Fletcher said one alternative that will be considered involves Texas setting up its own exchange operated within the state.
“The intricacies still have to be worked out, but I am of the opinion that Texas should do its own exchange” he said. “I think my constituents agree that our budget should not dictated by this bill.”
By rejecting the plan, Texas does not lose any of the money it already receives from the federal government for Medicaid. The additional money from the ACA would go to other states in need.