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Posted at 1:41 PM ET, 11/23/2010

Why does Gov. Rick Perry want more uninsured Texans?

By Ezra Klein

One of the weirder stories in the health-care sphere right now is that a handful of conservative states are threatening to pull out of Medicaid and instead free ride on the Affordable Care Act. I don't think there's much chance that this'll happen, largely for the reasons that Edwin Park outlines here: First, it's not actually clear that states can free ride on the new health-care law, and second, doing so would mean losing an enormous amount of federal funds.

Consider the case of Texas, which with 25 percent uninsured, leads the nation in not providing for its residents. If the state pulls out of Medicaid, as Gov. Rick Perry (R) is suggesting, that would put it at 40 percent uninsured, as Medicaid covers 15 percent of the state. Texas might try some other form of coverage, but it will have lost hundreds of millions of dollars of federal funding. You can occasionally do less with more, but when you have a lot less, you generally just do less. Whatever the state tried next would cover fewer people with less-comprehensive insurance, and it's a safe bet that the rate of uninsured would ultimately settle above 30 percent. Some legacy.

Conversely, if Perry does nothing, the federal government is going to come in and pick up most of the cost of a massive coverage expansion. Texas, in fact, will be one of the biggest winners from health-care reform, as its huge pool of uninsured residents means the state will get an uncommonly large amount of subsidies to bring that down to manageable levels. Texas "can expect to see Medicaid enrollment rise by 46 percent while state spending on Medicaid rises by about 3 percent.” Pretty good deal.

And it's not that different for other states. The new Medicaid costs are being almost entirely borne by the federal government. As Park says, the Feds will pick up "96 percent of the cost over the next ten years," which means "the expansion will add just 1.25 percent to what states were already projected to spend on Medicaid over that period in the absence of health reform."

There is nothing that states can do that would cover residents at a lower cost to their budgets than simply letting the new health-care law take effect. Any governor that is even vaguely interested in covering the uninsured should be celebrating the federal government's willingness to pick up 96 percent of the tab. Of course, as these trial balloons over Medicaid show, plenty of governors don't care about that at all. You'd think Perry, who runs a state where one out of four residents don't have health insurance, would be obsessed with figuring out ways to cover more Texans. Instead, he's leading the way in concocting schemes to cover fewer of them.

By Ezra Klein  | November 23, 2010; 1:41 PM ET
Categories:  Health Reform  
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Comments

Why should Perry care about people without health insurance? They're not likely to be large campaign contributors or have access to major media.

He can score some political points at no cost to anyone he cares about.

Texas actually has death panels for the poor - they'll refuse coverage if they think it's too expensive.

Posted by: fuse | November 23, 2010 2:05 PM | Report abuse

You'd think, but then you'd also think that the governor of one of the largest states in the country, or any state at all, would be working in good faith for the betterment of the citizens represented in the government he leads.

But that's not a safe assumption anymore, is it?

Posted by: automaticMojo | November 23, 2010 2:05 PM | Report abuse

Of everything we see every day, how much of it can't be explained by: Government of the rich, by the rich, and for the rich
?

PS Jon Stewart thinks Perry will be the next President.

Posted by: AZProgressive | November 23, 2010 2:09 PM | Report abuse

Thank you for covering this Ezra. I'm a Texan, and I voted for White. Perry is an opportunist who wants to run for the white house so he's using medicaid as a way to win favor with the populists.

Posted by: ania8 | November 23, 2010 2:11 PM | Report abuse

If you don't view health care as a 'right' then this makes perfect sense. When you can't afford to do everything, you do less with less.

And arguing that "the Feds will pick up "96 percent of the cost over the next ten years," which means "the expansion will add just 1.25 percent to what states were already projected to spend on Medicaid over that period in the absence of health reform."" is bogus. If you are a fiscal conservative, cost shifting to the Feds should be just as offensive as raising state taxes. The money has to come from somewhere.

Lastly, you are purposefully leaving out what happens at the end of the ten year window where the Feds are picking up 96% of the additional cost. This kind of thinking is what got us where we are today regarding deficits. Usually you are better than this with your arguments.

Posted by: jnc4p | November 23, 2010 2:13 PM | Report abuse

Gov. Perry believes that the state of Texas will be able to develop a better plan for its low income residents. I have my doubts. Anyway in the simpliest form, with EMTALA law regulating the state's ER's these same people in need of care will come through the ER's and be treated. With medical cost shifting the insured will bear the expense in their hospital costs and therefore premiums. I want these individuals to be healthy and covered under Medicaid so when they need ordinary care its a $40.00 visit to a health clinic and not a $4,000.00 visit to the ER.

Posted by: reddog3 | November 23, 2010 2:20 PM | Report abuse

Look beyond the uninsured--Medicaid is a major financing tool.

Texas has $1.4 BILLION in DSH payments through Medicaid. And $481 million in home health expenditures, and $5.1 BILLION in long-term care payments. All those holes will need to be filled, or we'll see nursing homes and hospitals going belly-up. Not to mention, rural hospitals get special Medicaid payment rates, as do community health centers, and there are a whole host of fraud/abuse activities that are paid something like 90-100% by the feds...where's the money to replace that come from?

And Texas has a 60% Medicaid match rate (70% lately with the recession boosters). How much of this is really just a federal pass-through that's recouped by the state through special assessments on hospitals and health facilities? Will they REALLY give up all this free federal money that goes into general revenues?

Posted by: theorajones1 | November 23, 2010 2:33 PM | Report abuse

You're assuming that Perry and Texas legislators are rational thinkers. Big mistake. Most of them don't believe in global warming or that the earth is older than 4,000 years either.

What makes you think that they care about the levels of the uninsured? Much less how the fed might help the state to pay for their care. The uninsured and the poor are just political pawns in a far larger game than providing services to those in need.

Thought exercises utilizing rational thinking and logic is wasted effort for these people.But it might make rational thinkers feel better about themselves and the conclusions they've arrived at.

But it is better to spend the energy thinking up alternative ways to meet policy goals, as self-gratuitous mental flagellations really are worthless here.

Posted by: jc263field | November 23, 2010 2:38 PM | Report abuse

Perry doesn't give a crap about the uninsured in Texas - his only game is to prop up his teabagger cred by appearing to reject everything and anything federal. Currently they tell the uninsured, "hey, you can buy into the state high risk pool!!" never mind that the premiums are over $1000 a month.

He's about to wreck this state on the altar of his own ambition.

Posted by: lcrider1 | November 23, 2010 3:24 PM | Report abuse

The new Republican mantra is no longer "Compassionate Conservatism" but "Ideologie Uber Alles".

Someday Republican voters and Tea Partiers will wake up and realize that they were not the ends of Republican politics, but the means back to power, and thus will be expendable once achieved.

Pols like Rick Perry will sacrifice their own supporters to stay pure to their principles — and win another term, then the Senate and finally the White House. Every step of the way the body count will rise.

Posted by: tomcammarata | November 23, 2010 3:26 PM | Report abuse

Texas likes big talkers. Big walkers? Not so much.

Posted by: pmcgann | November 23, 2010 3:53 PM | Report abuse

Ezra,

Your article has no mention of the money saved by eliminating Medicaid and how it could potentially be spent.

You say -
"Whatever the state tried next would cover fewer people with less-comprehensive insurance, and it's a safe bet that the rate of uninsured would ultimately settle above 30 percent. Some legacy."

It is currently at 26% and they are just floating this idea. What if TX could eliminate the need for Federal Tax Dollars and use the money saved to insure the residents coming off MediCaid? Isn't that a good goal for everyone to rally around? At least they are trying to look at ideas rather than simply saying "gimmee gimmee gimmee"

Posted by: Holla26 | November 23, 2010 3:56 PM | Report abuse

Because people who actually vote-- especially for Republicans-- tend to be insured, and having more uninsured Texans validates their sense of superiority. Flattery of the weak-minded is really an amazingly potent political tool, in case you haven't noticed.

Posted by: latts | November 23, 2010 4:09 PM | Report abuse

It would be important to look and see where Texas ranks in the country on other state run programs before we launch into the complexities of health care. Try looking at where we rank nationally on something important like our children's Education first. Not so much.

Posted by: reddog3 | November 23, 2010 4:15 PM | Report abuse

Yes, we Texans love big talkers. But to correct an earlier post, it isn't big "walkers" we also love. It is big "wankers." Witness our last two governors.

Posted by: BurningFeet | November 23, 2010 4:35 PM | Report abuse

I wouldn't assume there is any policy at all behind Perry's position. It's all about getting low-information voters to vote for you.

Posted by: tl_houston | November 23, 2010 5:09 PM | Report abuse

Please let Texas succeed from the union too. They have given us just too many gifts like Delay and both Bushes to be allowed to "help" us out anymore.

As for their thinking of new ways to deal with Medicaid, I strongly suspect, they will only look for ways to kill those who fall too far below the poverty line.

Posted by: Darsan54 | November 23, 2010 5:12 PM | Report abuse

He's planning on giving the uninsured free one way tickets to San Francisco.

Posted by: bgmma50 | November 23, 2010 5:30 PM | Report abuse

"Consider the case of Texas, which with 25 percent uninsured, leads the nation in not providing for its residents."

25% of the total population is uninsured, many of whom may be residents, but they are illegal ones.

Posted by: bgmma50 | November 23, 2010 5:40 PM | Report abuse

This sounds rather " Willy nilly " to me.

Posted by: tomkat2 | November 23, 2010 5:48 PM | Report abuse

"You're assuming that Perry and Texas legislators are rational thinkers. Big mistake. Most of them don't believe in global warming or that the earth is older than 4,000 years either."

And here's idiot liberal #1. Please, name the state that has created more jobs over the last decade than Texas.

"You'd think, but then you'd also think that the governor of one of the largest states in the country, or any state at all, would be working in good faith for the betterment of the citizens represented in the government he leads."

And idiot liberal #2. This statement, of course, means that 75% of Texas have the fortune of living in Texas's thriving economy rather than Michigan's shithole.

"Anyway in the simpliest form, with EMTALA law regulating the state's ER's these same people in need of care will come through the ER's and be treated. With medical cost shifting the insured will bear the expense in their hospital costs and therefore premiums. I want these individuals to be healthy and covered under Medicaid so when they need ordinary care its a $40.00 visit to a health clinic and not a $4,000.00 visit to the ER."

And idiot liberal #3. Medicaid patients use the emergency room MORE than the uninsured. And they pay less of the bill out of pocket.

Posted by: krazen1211 | November 23, 2010 9:13 PM | Report abuse

Unemployment in Texas: 7.9%.
Unemployment in Illinois: 9.5%.
Unemployment in California: 12.2%


Yeah, I know which I want.

Posted by: krazen1211 | November 23, 2010 9:14 PM | Report abuse

"Please let Texas succeed from the union too. They have given us just too many gifts like Delay and both Bushes to be allowed to "help" us out anymore.

As for their thinking of new ways to deal with Medicaid, I strongly suspect, they will only look for ways to kill those who fall too far below the poverty line."


There's no reason to kill them. They will merely ship them to California in exchange for California's businesses.

Southwest does it for $59.

Posted by: krazen1211 | November 23, 2010 9:18 PM | Report abuse

"Of everything we see every day, how much of it can't be explained by: Government of the rich, by the rich, and for the rich
?

PS Jon Stewart thinks Perry will be the next President."


The Presidency is his if he chooses to take it, that's for sure. The public is 'fed up'.

Why would re-elected governor who got 55% of the vote really give a damn about the musings of a progressive from arizona, or DC?

Posted by: krazen1211 | November 23, 2010 9:25 PM | Report abuse

While I agree that it would be insane to drop Medicaid in Texas, I wonder what would the effects be if all Texans were exempted from federal taxes that go to Medicaid, and then the state of Texas took that money and the money it was previously spending on Medicaid set up its own program?

Posted by: donhalljobs | November 23, 2010 10:07 PM | Report abuse

Some Facts. If you want to stay poor, ignorant and stagnant—Stay in Texas.

Gross State Product per capita
10 . California $42,325
29. Texas $36,484

GDP by State (in Millions)
California $1,739,674
Texas $1,053,905

Average Annual Pay
5. California $50,538
12. Texas $44,695

Persons Below Poverty Line
21. California 13.3 million
8 Texas 15.8 million

Share of US Venture Capital Investment
California 42.2%
Texas 4.5%

Percent of population with an advanced degree
California 10.8%
Texas 8.2%

Patents Granted by State
California 22,200
Texas 6,184

The truth is that the US depends on California for innovation new ideas and economic growth. We are the most dynamic and productive labor force in the country. The US could do with out Texas just fine… With out California (the worlds 8th largest economy) not so much..

Posted by: deb1267 | November 23, 2010 11:55 PM | Report abuse

"Average Annual Pay
5. California $50,538
12. Texas $44,695"

That would be convincing except we all know that things cost quite a bit more in California. Let's do a purchasing power partiy adjustment.

$44,695 in Dallas, TX equals:

$67,436 in Oakland
$57,443 in Sacramento
$65,122 in San Diego
$79,791 in San Fransisco

$44,695 in San Antonio, TX equals:

$63,279 in Los Angeles-Long Beach
$54,219 in Sacramento
$61,467 in San Diego

Adjusting for the cost of living, $44,695 in Texas is ~$60,000 in Californian purchasing power. Remember also that in Texas, 92.1% of the labor force is employed v.s 87.8% in California.

"Persons Below Poverty Line
21. California 13.3 million
8 Texas 15.8 million"

However, this is the federal poverty line and we'll need to adjust it for the cost of living.

Assuming that living costs in Texas are close to the national average, $22,050 is the poverty line for a family of four. In San Diego, it would then be $30,324, and in San Fransisco is would be $37,154.

http://cgi.money.cnn.com/tools/costofliving/costofliving.html

I don't have the data to do this, but something tells me that the Californian poverty rate would jump significantly if the threshold reflected the higher cost of living there.

"Share of US Venture Capital Investment
California 42.2%
Texas 4.5%"

In otherwords, California is lucky that Silicon Valley turned into a Mecca for innovation.

Texas and California tie for the most fortune 500 companies:

http://www.dallasnews.com/sharedcontent/dws/bus/stories/041610dnbusfortune.ca957f.html

Texas is also continuing to grow rapidly in population, with 4 of its cities in the top 6 list for population growth.

http://www.brookings.edu/opinions/2010/0625_population_frey.aspx

There are nice aspects of California, to be sure - Silicon Valley, several of the local universities are top notch, and the climate is very nice there.

If you switched the governments of Texas and California, my expectation is that California would be better off and Texas would be bankrupt.

Posted by: justin84 | November 24, 2010 9:35 AM | Report abuse

"Consider the case of Texas, which with 25 percent uninsured, leads the nation in not providing for its residents." [...]

"You'd think Perry, who runs a state where one out of four residents don't have health insurance, would be obsessed with figuring out ways to cover more Texans. Instead, he's leading the way in concocting schemes to cover fewer of them."

Earth to Ezra Klein: It's not the government's job to provide health insurance or health care to its citizens. Not the federal government's job, not the state government's job.

It's the citizens' job to provide health care for themselves.

Mark Impomeni
RedState.com

Posted by: MarkImpomeni | November 24, 2010 4:08 PM | Report abuse

Catastrophic coverage for more people is better than overpriced full coverage for fewer people.

Posted by: staticvars | November 24, 2010 10:07 PM | Report abuse

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