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Texas Health Care Climate: Will the Changes Suffice?

by E. Dale Burrus, JD, LLM on November 28th, 2012

In June, 2012, the United States Supreme Court ruled that the Patient Protection and Affordable Care Act (“ACA”) was constitutional except for one provision – the requirement that states expand Medicaid to cover residents with incomes up to 133 percent of the federal poverty line. The result of the ruling was that states could now opt out of mandated Medicaid expansion. States would not lose federal matching for current Medicaid enrollees but would lose federal funds that would pay 100 percent of expansion during the first year, 95 percent for the second year, and 90 percent thereafter.

States can also refuse to participate in the health insurance exchanges required under the ACA. These exchanges would allow the states to offer a variety of certified health plans and provide information and educational services to help consumers understand their options. A state’s refusal to implement the exchanges results in the federal government doing so within the state.  States must decide whether they are participating in the exchanges by December 14.  As of last week, 21 states were undecided, 12 participating, 4 leaning towards participating and 5 leaning towards not participating:

As a result of the Supreme Court’s ruling and after the presidential election that nullified the possibility of repealing the Health Care Act, many Republican governors declared that they will opt out of the Medicaid expansion.

Governor Rick Perry of Texas has loudly professed that he will not accept the federal money for the expansion of Medicaid and will not participate in the exchanges.

So where does Texas now stand? According to a recent article, Texas Medicaid has a $4.7 billion deficit that must be funded by March or it will run out of money. Further, the state’s Medicaid program has requested $6.7 billion while the Texas Legislature vowed not to raise the budget above $7 billion.

In an effort to address this critical problem, Texas has been experimenting with alternatives to the federal intervention. It developed the Texas Women’s Health Program that expands coverage to women for preventative care and contraception. However, this funding is at risk due to Perry’s exclusion of Planned Parenthood from the program.

Other alternatives to federal intervention that Texas is trying include obtaining a Transformation Waiver that increases Medicaid funding to providers who participate in efficient and higher quality health care.  Further, the state is implementing managed care for Medicaid in the Rio Grande Valley in which insurance companies as opposed to the state manages the Medicaid benefits.

For a discussion of the alternative changes in Texas please see:

Whether these measures will overcome the calculated cost of opting out of the ACA Medicaid expansion will soon be seen.

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From → Health Law