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If Texas dropped out of Medicaid, ctd.

By Suzy Khimm

Reihan Salam responds to my post on Texas Medicaid, arguing that conservative states that ditched the program wouldn't just leave poor Texans to fend for themselves in emergency rooms. Rather, he writes, "states that opt out of Medicaid could, and presumably would, create new programs, perhaps modeled on Indiana’s subsidized HSA program. Indeed, experimenting with new models for providing the poor with cost-effective insurance coverage has been a subject of great interest in right-of-center policy circles for some time."

Salam is correct that states that completely withdrew from Medicaid could conceivably set up their own state-based programs to cover the poor. But state governments would be stretching their resources awfully thin if they branched out on their own, as they'd be forgoing federal matching funds. The federal government currently covers 56 percent of states' Medicaid costs, on average — and 60 percent of coverage in Texas. States could design the programs however they'd like, but without the federal matching funds, even the most innovative, cost-effective coverage could go only so far.

"It's hard to do anything with less than half the money. You do less with less," says Anthony Wright, executive director of Health Access, a Sacramento-based advocacy group that has supported the Medicaid expansion. In fact, California had been struggling to fund its own
county-based health-care program for poor residents not covered by Medicaid — prompting the state to embrace the federal health law's expansion as soon as possible, as I explained on Thursday.

States could certainly try using their own money to fill in the gaps if they opted out of Medicaid entirely. But the massive loss of federal matching funds would almost certainly result in scaled-back coverage, which is why I argued that hospital ERs "would likely become the de facto safety net" under such a reality. And some of the Texas lawmakers who've been clamoring for the state to ditch Medicaid have acknowledged that they want to pare back coverage as well. "If people are in superbad poverty, that’s one thing,” GOP State Rep. Warren Chisum tells Texas Tribune/Kaiser Health News. “It breaks my heart when there’s someone who smokes, and who stays drunk half the time, and we’re supposed to provide their health care.”

The Tribune/Kaiser story lays out other reasons why total Medicaid withdrawal would be undesirable and politically unlikely, as it would deal a huge blow to hospitals, providers and other major recipients of the program's funds. The other, more feasible option would be for states to persuade the federal government to grant them a Medicaid waiver that would allow them to revamp the program in their own states. Salam argues that such flexibility could end up helping the poor, while being more fiscally sane for state governments: by giving states more autonomy, he writes, "finding new ways to deliver quality coverage to poor people at low cost would be easier."

Some states have already tried going this route: As my fellow blogger Dylan Matthews points out, Oregon's returning governor, John Kitzhaber, received such a Medicaid waiver to craft a celebrated state-based alternative that was still supported by federal funds. But, Matthews adds, the Affordable Care Act doesn't preclude some of these reforms from happening. States can still apply for a state innovation waiver, provided that their coverage and out-of-pocket spending rules match what's in the federal law. So if state governments truly wanted to come up with a more cost-effective Medicaid alternative, they have some leeway to do so under the federal health law.

That being said, there's no denying that federal money comes with major strings attached: States can't scale back Medicaid eligibility, which will be majorly expanded under the law, and they'll be partly responsible for shouldering the cost. I do believe there are reformers who genuinely want state governments to find more cost-effective means of covering the poor — and who think the federal law is getting in the way of that effort. But others, like Texas Rep. Chisum, maintain that the government simply shouldn't be responsible for finding ways to insure certain segments of the population. With more a dozen states are now considering a Medicaid opt-out, critics should be pressed to explain whether they intend to revamp the program to better serve a similar population or whether they want to scale back coverage altogether.

By Suzy Khimm  | November 12, 2010; 3:52 PM ET
 
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Comments

this is a battle that has been in progress since medicaid became law

notions of state sovereignty have been and are used by many groups to advance their ideology or to secure advantage for their commercial interests

as you point out there are pathways for innovation and adaptation to local "needs"


Posted by: jamesoneill | November 12, 2010 4:32 PM | Report abuse

this is a battle that has been in progress since medicaid became law

notions of state sovereignty have been and are used by many groups to advance their ideology or to secure advantage for their commercial interests

each state has its own medicare program, federal funding substantially reduces state liabilities, federal rules establish common and equal standards across states,
as you point out there are pathways for innovation and adaptation to local "needs"

ronald regan's "welfare queens" statement epitomizes the politics of medicaid


Posted by: jamesoneill | November 12, 2010 4:37 PM | Report abuse

The common sense solution would have been a single payer government run HC program funded on a separately taxed basis entirely, like Social Security. However this total mess that the administration has created set that idea back for a generation at least.

This is why doing something half-ass*d is often very much worse than doing nothing at all.

Posted by: 54465446 | November 12, 2010 5:38 PM | Report abuse

"Reihan Salam responds to my post on Texas Medicaid, arguing that conservative states that ditched the program wouldn't just leave poor Texans to fend for themselves in emergency rooms."

If Salam knew more Texans, I suspect he might begin to recognize the flaw in the statement that "conservative states . . . wouldn't just leave poor Texans to fend for themselves."

Heck yeah they would. Especially if it shifted the population onto states with a greater sense of social responsibility.

Once the economic crisis passed, they'd want the labor again, but Texas conservatives by and large don't have much regard for human life outside of the womb. Especially if it's got dark pigmentation and is poor.

Posted by: JPRS | November 12, 2010 6:53 PM | Report abuse

I just want Texas to drop out of the United States.

Posted by: phillygirl3 | November 13, 2010 12:13 AM | Report abuse

Obama, 3 days after taking office:

'I won' (we will do it my way)

Posted by: TECWRITE | November 13, 2010 10:51 AM | Report abuse

One point I've read that these conservatives seem to overlook is that if ERs do pick up the treatment (since they can't refuse care), it will not only shift much of the cost on to those who have insurance (in the form of higher rates/prices), but that it may also affect property taxes, depending on the state, and how the hospitals are funded.

One of the huge attacks that state Republicans made in the last election was that because the Democratically-controlled legislature had failed to fully fund education (because of revenue shortfalls), that had pushed the cost back on to local school districts, which either had to use reserve funds, or to raise property taxes, in order to fund existing operations under their budgets. Of course, in a 30-sec campaign ad, the claim simply became "(Democrat) X raised property taxes", but without explanation, which made it sound like the legislature had voted on property taxes instead of the local government entities. Republicans that make these kind of spending decisions that push costs to taxpayers in the form of higher insurance costs or property taxes are opening themselves up to the same kind of attacks in the next election cycle.

Posted by: reach4astar2 | November 13, 2010 2:53 PM | Report abuse

So Texas and several other Red states want to opt out of Medicaid. Great ! It will lower the overall cost to the Federal Govt and reduce the deficit. The Resulting effect in those states is not my problem but the responsibility of the voters of those states.

Posted by: Falmouth1 | November 15, 2010 5:44 AM | Report abuse

it is perfectly OK for Massachusetts to have an Obamacare like plan because Massachusetts is a STATE.

Vermont has its own version of almost universal coverage. Perfect for Vermont, as Vermont is a state. You also mention California and I am trust there may be some others

Every state has the right to have its own version, or NOT. I am sure more and more states would have been getting different plans over time. Not any more, of course, as the Federal Government has stepped in.

My main opposition to this law is that it is the Federal Government is doing it.

Posted by: steveA2 | November 15, 2010 7:05 AM | Report abuse

it is perfectly OK for Massachusetts to have an Obama like plan because Massachusetts is a STATE.

Vermont has had its own version of almost universal coverage. Perfect for Vermont, as Vermont is a state. You also mention California and I trust there may be some others

Every state has the right to have its own version, or NOT. I am sure more and more states would have been getting different plans over time. Not any more, of course, as the Federal Government has stepped in.

My main opposition to this law is that it is that the Federal Government is doing it.

Posted by: steveA2 | November 15, 2010 7:07 AM | Report abuse

I just want Texas to drop out of the United States.

Posted by: phillygirl3 | November 13, 2010 12:13 AM |

Oh no you don't. If we in Texas dropped out of US, you would be paying $10 a gal for gasoline! We have the refineries!! Texas is self sustainable in industry and agriculture. You're just jealous.

Posted by: kabreu54 | November 15, 2010 7:28 AM | Report abuse

"I do believe there are reformers who genuinely want state governments to find more cost-effective means of covering the poor"

Yes there may be some reformers that what that but this quote tells the true story:

“It breaks my heart when there’s someone who smokes, and who stays drunk half the time, and we’re supposed to provide their health care.”

The people who want to have their state drop medicaid want to punish the poor, their children, and the elderly poor, who they see as lazy bums that stay drunk all the time an suck on the govmnt teet.

Posted by: BottyGuy | November 15, 2010 9:42 AM | Report abuse

Unfortunately, I live in Texas and trust me, the state will take every opportunity not to help the poor. We have the worst health insurance for children and we have the worst system for qualifying for assistance. By the way, Medicaid is not just for "drunk" minorities trying to get something for nothing, that is typical Texas redneck thinking. Medicaid is also for seniors who through no fault of their own, find themselves in nursing homes that they cannot afford to pay for on their own. Is it wrong to give a little respect and dignity to seniors? Have we become so hateful and heartless that we cannot care for those less fortunate than ourselves? I don't even recognize this country anymore, it is a disgrace that we don't care about the health and welfare of our neighbors. I hope those who want to abolish Medicare, Medicaid and Social Security never need it!

Posted by: susanmdabney | November 15, 2010 10:24 AM | Report abuse

With Texas facing an $18B shortfall for the next two years, it is unlikely that the state will have money for more medicare. Perry is to busy running for President, lining his own pockets (and that of his friends) and funding failing big businesses to try to figure out what to do. Add his "Tea Party ideology" and you have a recipe for a right-wing government run by people whose philosophy is "I got mine by hook or crook and I intend to keep it. To heck with public schools and the poor".

Posted by: rwilliams07 | November 15, 2010 10:36 AM | Report abuse

Why do indigent people vote Republicant?
Repubs. want their votes but do not wish to offer them relief from human suffering.

Posted by: fasm7700 | November 15, 2010 12:46 PM | Report abuse

Ok. Think about it. Texas, for all its budget smarts, is facing a $20-25 billion short fall over the next two years. Texas doesn't like paying the 40% of the Medicaid tab which amounts to about 8 billion of the nearly 25 billion total cost per year. So they are going to skip the 60% the Feds provide as matching funds and then cut that 8 billion to something they think is reasonable, maybe 4 billion per year. So, they will save 8 billion over the biennium, shaving their shortfall to 16-21 billion. But now the nursing homes and public sector health care systems just lost about 40 billion in revenue over two years.

Texas law says the county is the health care provider of last resort. So local taxes (ie. property) will go up to meet the acute care needs, but only in those counties that have a public sector owned hospital, eg. the big cities. Rural counties will skate like always. And grannies all over Texas get to go home and stay with the kids. The significant majority of Medicaid expenditures everywhere are for the elderly, not your anchor babies.

It sort of clarifies why the state has a $25 billion short fall in the first place.

Texas politicians seem to be forgetting that private sector solutions work best when there is a really big trough of government money, not a little one. If the White House had a brain they would say: 'Sure. Go for it. The rest of the country could use the money.' But the business interests in the Texas will make sure this doesn't get farther than a talking point.

Posted by: Nat_51 | November 15, 2010 11:35 PM | Report abuse

Well, this is Texas, after all. I'd guess the Texas alternative to Medicare will be: "Poor people are tough; they don't need doctors".

Posted by: Iconoblaster | November 16, 2010 12:26 PM | Report abuse

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