Policy Spotlight: Texas’ Healthcare Fiscal Cliff
Texas is on the verge of forfeiting approximately $12 billion per biennium in federal support payments for indigent healthcare. That’s $12 billion of our own tax dollars that won’t be coming back to the Texas economy unless we fix the state Medicaid system next legislative session. How did we get here? How do we fix it?
We got here by refusing to accept the federal government’s initial offer to pay for making health insurance coverage available to more very-low income Texans under the Affordable Care Act (the “ACA”). Instead, in 2011 and 2017 the state negotiated short-term deals (“Section 1115 waivers”) to get federal support for the state’s far more restrictive Medicaid program. Rather than covering more people under the ACA, where the cost would have been funded by the federal government at 100% for several years and at 90% thereafter (newsflash: it does not drop to zero!), Texas chose to cover fewer people, fund the cost with local property taxes, and get far less in federal support. Worse still, the deal expires soon, and with it goes the $12B.
The problem can be solved by expanding healthcare coverage under the ACA. Not politically possible? Of course it is. Several states with Republican leadership, like Ohio and Indiana, have been benefiting from Medicaid expansion for years. Like those states, Texas can expand coverage under the ACA while maintaining the flexibility to accommodate concerns and objectives from across the political spectrum.