|AUSTIN, April 1 - Texas Impact, Methodist Healthcare Ministries and former Texas Deputy Comptroller Billy Hamilton have issued a line-by-line rebuttal of Gov. Rick Perry’s opposition to expanding Medicaid.
The 2,000-plus word document is titled Smart, Affordable and Fair: Why Texas Should Expand Medicaid to Low-Income Adults.
Hamilton was commissioned by Texas Impact and Methodist Healthcare Ministries to study the economic impact of Medicaid expansion. His report pointed out that two million Texans would become eligible for Medicaid under expansion. In addition, $7.7 billion in federal funds would be injected into the state's economy over the next biennium.
The benefits of expanding Medicaid would be especially notable in the Rio Grande Valley, the report noted. Cameron, Hidalgo, and Willacy counties could realize a combined $1.5 billion in federal funds from 2014-17 and over 80,000 Valley residents would be eligible for Medicaid if the program were expanded.
Here is the Smart, Affordable and Fair: Why Texas Should Expand Medicaid to Low-Income Adults document that rebuts Perry’s position:
Responses to Arguments against Expansion
1. We can’t afford to expand Medicaid. It is too expensive. It is already 25 percent of our state budget. Expanding Medicaid to adults would overwhelm our budget.
a. Texas will spend enough in 29 piecemeal state health programs on this population in the next decade to pay the state share of costs for the expansion, which would cover many more adults. The net new cost to the state over the next ten years is $0.
b. The federal funds will also add new revenue from the economic boost and would reduce uncompensated care costs at the local level.
c. In fact, we cannot afford not to extend it. Children who are currently eligible and not enrolled will be enrolling in 2014 whether we extend Medicaid or not, and the state will have to find new revenue to meet the state match. Expanding Medicaid would provide the cost savings and new revenues to help fund it.
2. Medicaid expansion will cost taxpayers money.
a. In fact, opting out will cost taxpayers money.
b. Texans will be paying in to the $100 billion kitty whether they opt out or not. Opting out will not enable them to keep their money.
c. At the same time, Texans will continue to fund adults in the costly “Unmatched Locally Funded Emergency-Room Treatment” program and the 29 other piecemeal state funded programs. Opting in, on the other hand, would provide relief, and the savings at the state level alone would be enough to provide the state match for the expansion for the next ten years.
d. Opting in will return the $100 billion to Texas, and the economic boost would generate jobs and tax revenue that would allow more people to keep money in their pockets. Opting out would be a huge opportunity cost for 200,000 people who would not get the jobs that opting in would bring.
3. Medicaid is broken.
a. The truly broken system is the “Unmatched Locally Funded Emergency-Room Treatment” program that people are in now. Shifting them to Medicaid managed care would improve their situation substantially since they would receive preventive care.
b. The increase in provider rates to the Medicare rate will increase access to physicians and providers.
c. The streamlining in eligibility and other systems that ACA is already requiring states to initiate, regardless of whether or not they extend Medicaid, will allow states to handle the influx of new enrollees from an expansion while also reducing susceptibility to fraud.
d. Texas has already substantially reformed Medicaid by moving services to managed care. The statewide rollout of Medicaid managed care is the direct result of its success in delivering cost savings and protecting the state from fraud.
4. Only 31 percent of physicians accept Medicaid in Texas, according to a survey by the Texas Medical Association. We can’t add a million more people to the system.
a. Wrong. The TMA survey showed that about 58 percent of physicians accept Medicaid in Texas (31 percent accept ALL new Medicaid patients and another 27 percent accept a LIMITED number of NEW Medicaid patients).
b. Texas does have a shortage of doctors accepting Medicaid, however, because Texas has historically underpaid physicians. The Medicaid rate in 2012 was 61 percent of the Medicare rate. Other states with higher rates don’t have shortages. Increasing the rate to the Medicare rate would increase the percentage of physicians accepting Medicaid to 78.6 percent nationally, according to a study published in Health Affairs.
c. The ACA increases rates provided to primary care physicians for 2013 and 2014 to the Medicare rate and pays for it with 100 percent federal funding. Expanding Medicaid will generate the revenues necessary to continue this rate increase after 2014.
5. Expanding Medicaid will increase the federal deficit.
a. Wrong. The ACA includes a number of new revenue streams that will pay for the expansion. (These include penalties for those above 138 percent of poverty who do not get insurance, increases in taxes on unearned income for wealthy individuals, an insurance premium tax, an additional tax on high-end insurance policies, a tanning bed tax, fees on pharmaceutical, medical devices and insurance companies, excise taxes on imports of pharmaceuticals and medical devices, and offset savings in Medicare, among others.)
b. The Congressional Budget Office has determined that the ACA will not add to the federal burden but, instead, will lower future deficits by more than $200 billion over ten years.
6. Texas needs a block grant system instead of extending Medicaid.
a. Delaying a Medicaid expansion on the tiny and unrealistic hope of a block grant will cost Texas $300 million per month in 2014 and $7.7 billion for the biennium.
b. Extending Medicaid would not jeopardize Texas' ability to negotiate a block grant or a waiver in the future. In fact, it would ensure a larger block grant if the state could negotiate one because our funding would be larger--a factor that would give us more flexibility should we ever get one. Not extending Medicaid will not force the federal government's hand to give us one. It will only leave Texas out in the cold.
7. Texas is unique, and we don’t need a “one-size-fits-all” Medicaid program.
a. Texas is not unique other than that we have the highest rate of uninsured in the nation. Otherwise, we are just like other states. We have a lot of uninsured adults below 138 percent of poverty just like other states. They need medical care for the same reasons that other people in other states need medical care. The diseases are the same.
b. Medicaid currently works for 3.5 million Texans, mostly children and the elderly. The system would work the same for the newly eligible adults. The ACA anticipated the need to streamline eligibility systems for the expansion and states are in the process of doing that right now. The state can always apply for a waiver if it wants to try something new, but that is no reason to delay implementation.
8. Any program extending insurance to low-income adults needs to have an assets test.
a. Wrong. Nearly all states had eliminated the assets test before the Affordable Care Act did due to administrative costs and difficulties. The removal of the assets test will significantly reduce states’ administrative costs, increase access and create a more transparent eligibility framework. When Oklahoma eliminated its own Medicaid asset test in 1997, the state saved approximately one million dollars. Delaware’s asset test removal resulted in “administrative simplicity,” and Rhode Island stated that, “[the asset test] would cost more in administrative costs than the savings in denying care to low-income people.”
b. Adding an assets test would bog down the process resulting in delays and reduced federal funds to the state.
9. Any program extending insurance to low-income adults needs to require co-pays, premiums and deductibles.
a. Any such requirements reduce federal funds to the state while taking money out of Texans’ pockets. They also reduce federal funds because fewer people can’t afford to access services.
b. Any such requirements increase administrative costs. Texas already requires some co-pays, which likely cost more to administer than they are worth.
c. Any such requirements shift costs to physicians who usually waive them; however, waiving small co-pays may not be a problem, but asking too much would reduce the number of physicians willing to take on Medicaid patients (and their debts).
10. Forcing people into Medicaid when they could do so much better with private insurance is not the answer.
a. Expanding Medicaid to adults would not force anyone to enroll in the program. People always have the option of buying insurance in the private market. People below 100 percent FPL will not be eligible for a government subsidy under the ACA, but they are welcome to buy private insurance anytime they want. Or, they can pay their health care bill themselves.
b. If, however, they want the government to pay their bill, then they will need to enroll in Medicaid if the state expands it to cover them. If it does not, then local governments and hospitals will continue to pick up their tab as they do now—without any federal match.
11. The high costs of uncompensated care are actually due to people on Medicaid using hospital emergency rooms for routine treatment.
a. No. The $4.4 billion in annual costs ($2.5 billion for local governments and $1.8 billion for hospitals) do not include any costs of people insured by Medicaid. They also do not include bad debt caused when insured people do not pay their copayments. The costs include only those of uninsured individuals who seek treatment.
12. Studies have shown that people are better off being uninsured than on Medicaid.
a. A cadre of physicians and scientists have debunked the interpretation of the studies as proving that people are better off uninsured in an article published in The New England Journal of Medicine. (http://www.nejm.org/doi/full/10.1056/NEJMp1103168)
b. Criticisms of these studies show that they do not take into account how long a person was on Medicaid or uninsured before arriving at the hospital for surgery. (Many uninsured people enroll in Medicaid when they present to a hospital due to being medically needy. Likewise, many uninsured people may present to an emergency room having been recently employed with private insurance but lost their jobs and insurance because of illness.)
c. Surgical patients are often dual enrollees in Medicaid and Medicare, indicating the presence of significant disabilities and serious long-term illnesses, and so are often more ill even than the uninsured. But, to interpret this as Medicaid somehow being the cause, is absurd.
d. It makes no sense to suggest that having to wait to see a doctor is better than having no doctor at all. Studies have shown that having insurance saves lives, not the other way around. Most recently, a Harvard University study found that recent Medicaid expansions in several states reduced death rates for adults by 6.1 percent compared with neighboring states that did not extend Medicaid. In Texas, that equates to 5,700 adults each year who would be saved from a premature death if Texas expanded Medicaid.
e. Arizona governor, Jan Brewer (R), has touted the Medicaid program in Arizona as "the nationally-recognized gold standard for cost-effective, managed care in this country," Apparently, she does not think Medicaid is "broken" in her state. (http://www.azgovernor.gov/dms/upload/GS_011413_SOS2013.pdf)
13. Arizona and Maine expanded Medicaid in the last decade, and it overwhelmed their budgets and increased uncompensated care costs and the percentage of uninsured, which is what will happen here.
a. Wrong. There will be no net new cost to the state over the next 10 years (since we already spend the state share of the expansion on this population in 29 state health programs) and a positive impact on the state's budget due to the dynamic new tax revenues and insurance premium revenues that it will generate.
b. Arizona and Maine had high state match rates like our current one of 40 percent, but unlike that expansion, the present adult expansion under the Affordable Care Act (ACA) provides for the federal government to fund 100 percent for the next three years and no less than 90 percent by 2020.
c. Arizona experienced higher than anticipated caseload growth because their equivalent to our Legislative Budget Board used extremely poor forecasting techniques, including five-year old base data that underestimated the number of people who could enroll. They also used totally inappropriate and incorrect cost data to estimate the costs, relying on costs for parents, which are much lower than for childless adults, who are older, even though that information was readily available. If calculated correctly, they would have been on target.
d. Uncompensated care costs and the number of uninsured climbed in these states over the decade because of high population growth rates and the economic crash that threw more people into poverty, out of work and out of insurance, along with higher health care costs in that decade, as confirmed by Census data. If they had not expanded Medicaid, the uncompensated care costs and the number of uninsured would be off the charts. In Arizona, an additional 376,600 would be uninsured, increasing Arizona’s uninsured rate by about 6 percentage points, from 17.2 percent to 23.1 percent. The issue is the same with Maine, who had about 146,600 adults in their Medicaid program in 2010-11. If the adults on Medicaid were to lose benefits, the uninsured rate in Maine would increase from about 10.8 percent to 24.8 percent.