Texas Rejects Medicaid Expansion In Health Law

Texas Gov. Rick Perry has announced that he opposes the expansion of Medicaid as provided in the Patient Protection and Affordable Care Act, and the creation of state insurance exchanges. Melissa Block talks to Emily Ramshaw, editor at the Texas Tribune, for more on what Perry's announcement means for Texas.

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MELISSA BLOCK, HOST:

Texas is saying no to key parts of the federal health care law. Today, Governor Rick Perry said Texas will not create a state exchange for people to buy health insurance and will not expand Medicaid. In a letter to Health and Human Services Secretary Kathleen Sebelius, Governor Perry called both provisions a power grab, brazen intrusions into the sovereignty of our state.

Here's Governor Perry today on Fox News.

GOVERNOR RICK PERRY: Every Texan has health care in this state. From the standpoint of being able to have access to health care, every Texan has that. How we pay for it and how we deliver it should be our decision.

BLOCK: And to talk about what this means for Texas and its uninsured population, I'm joined now by Emily Ramshaw. She's been covering this story for the Texas Tribune. Emily, welcome.

EMILY RAMSHAW: Thanks, Melissa.

BLOCK: When Governor Perry says every Texan has health care in this state, what does he mean?

RAMSHAW: That word access is a tricky word. When Perry talks about Texas, he loves to talk about MD Anderson Cancer Center and UT Southwestern in Dallas, these world class health care institutions. But that doesn't mean that all average Texans have access to that kind of care. You know, we're in a state where 25 percent of the population is uninsured. They get hardly any preventive care. And when they get very sick, they end up in the emergency room, which costs the state a ton of money.

BLOCK: Twenty-five percent, that's the highest rate of uninsured people in the country, I believe. Under the Medicaid expansion, if Texas had gone along with it, how many people would have been covered?

RAMSHAW: Under this expansion, 1.8 million more Texans would be eligible for Medicaid. But there are also many other people in Texas who are currently eligible for Medicaid who simply aren't on the rolls; either it's expired and they've forgotten to re-apply or they simply didn't realize they were eligible.

I think, you know, what some state leaders are afraid might happen is that all these people who are currently eligible but aren't enrolled, might be spurred into action by federal health reform. And so, Texas would face not just this additional 1.8 million people but, you know, up to a million other people who simply aren't enrolled yet.

BLOCK: Governor Perry says that Medicaid expansion would threaten Texas with financial ruin. How do those numbers line up, because But federal government would pay 100 percent of the Medicaid expansion cost at the outset; that then tapers down to 90 percent by 2020?

RAMSHAW: Right, between 2014 and 2019, the federal government would provide about $100 billion for Texas, at a cost to Texas of about $6 billion. So, obviously that's not pocket change. But Texas, of all the states, was going to seem to get sort of the biggest bang for its buck.

I think the bigger question here is whether in the long-term Texas is not going to take this money. I think it's sort of more likely that the federal government says, OK, Texas, what do you need to play ball here? I think you can see, down the road, a conversation happening where Texas may accept this money under a certain set of restricted rules.

BLOCK: So sort of a waiver. You're talking about Texas having leverage really to bargain with Health and Human Services?

RAMSHAW: Exactly. You know, in the last year, Texas has worked pretty closely with the Centers for Medicaid and Medicare Services to design a Medicaid waiver for Texas. So the lines of communication have been built. I think it's very likely that down road, Texas would try to find a way to accept some of these funding, but under the auspices of a Texas-designed program.

I think today what you heard was a lot of political bluster. I think what you're going to see in the next several months is really, you know, extensive conversation about the ins and outs of this money, and how to design Medicaid, how to find a way to make this work in some way for Texas.

BLOCK: We've been talking about the Medicaid expansion. But the other part of this is the health insurance exchange, for people to buy insurance. Texas says it's not going to set one up. But that means that the federal government will set one up for Texas, right?

RAMSHAW: Right, and this is very controversial for conservatives because basically what Perry is saying is we are not going to take control of this in Texas, so we are going to allow the federal government to design this program for us. I think there was one thing that wasn't mentioned today. And that is there appears to be some provisions in the law that would allow the federal government to establish exchange from the get-go, but allows Texas to petition to take control over it a little more down the line.

Texas didn't mobilize to get health insurance exchange in place. There are a lot of theories that even if Texas decided it wanted to run its own insurance exchange now, Texas doesn't have the time to get one in place before the deadline.

BLOCK: Emily Ramshaw is editor of the Texas Tribune. Emily, thanks so much.

RAMSHAW: Thanks for having me, Melissa.

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