Probably the most important health policy report of the year for Texas was released on Friday by the state, and it centered around the pros and cons of opting out of Medicaid.
The bottom line of the 78-page report was that Texas was in a “no-win dilemma” on Medicaid because the state would somehow have to replace $15 billion a year in federal funding if it wanted to have a program that paid doctors, hospitals and nursing homes to care for poor elderly, disabled, pregnant women and kids.
While the report was starkly honest in many respects, I found that it skewed a few things here and there. I think it’s important to put some assumptions in “further context”:
What the report says: “State participation in Medicaid is voluntary; however, if a state chooses to participate, it must follow federal rules regarding which populations are eligible for benefits and the levels of coverage that must be provided.”
Further context: Actually, states have a great deal of flexibility in deciding what populations are eligible for benefits, and Texas is among the most stingy. Texas is one of only two states that requires an asset test, for example, to qualify for Medicaid benefits for children. In addition, many states cover children in families up to 400% of poverty. In Texas, CHIP covers children in families up to 200% of poverty. And, these are just a few of many examples. In short, states have a lot of flexibility in who are covered and what services they receive.
What the report says: “In 2008, Texas was home to 10% of the country’s population living in poverty…but received a little under 7% of federal Medicaid dollars. In comparison, while New York had 7% of the country’s population in poverty, it received more than 12% of federal Medicaid dollars.
Further context: One big reason that New York receives more Medicaid dollars is because it allows more of its residents to be eligible for Medicaid. For example, NY does not require a waiting period in which children have to be uninsured before they’re eligible for Medicaid and CHIP. In Texas, children must be uinsured for 3 months before they’re eligible. In NY, parents in a family of three can earn up to $27,456 annually and still be eligible for Medicaid. In Texas, if a family earns more than $4,824 annually, they cannot be eligible for Medicaid. Naturally, New York is going to get more Medicaid dollars from the feds. It allows more poor families to get their healthcare through Medicaid. And, by the way — how does a family of three in Texas even survive on $4,824?
What the report says: “With a 9% annual rate of growth, the Medicaid program will prove unsustainable over time, even with substantial federal participation…For the period 2014-2019, the ACA is expected to increase Texas Medicaid spending by $5 to $9 billion in state funding.” Further context: Under the health reform law, the federal government will pick up 100% of the cost for all newly eligible people through 2016, a rate that will drop gradually to a 90 percent match in 2020 and beyond. So, if Texas had been insuring these uninsured people in the past, the feds would only have been paying a 60% match. Because of health reform, the feds will pay a much higher share of the costs.
Some good nuggets out of the report:
- While kids make up 70% of the Medicaid population, they’re a minority of the spending. Non-disabled children make up less than 30% of Medicaid spending.
- Medicaid pays for half of Texas nursing home care. Long-term-care insurance anyone?
- Children account for 42% of all of Texans living in poverty.
- Two-thirds of small businesses do not offer insurance coverage, according to the Texas Department of Insurance.
- If Texas dropped out of Medicaid, only about 10% of those now covered would be likely to buy private coverage. That would leave 2.5 million more uninsured in a state that already leaves the nation in uninsured residents.
The entire report can be downloaded here: http://www.hhsc.state.tx.us/HB-497_122010.pdf