As two pediatricians who have collaborated on cost-effective health insurance programs for Houstonians, we can’t help but wonder if political leaders in Texas are flat out of ideas. One of us hails from Dallas, trained in Houston, and is now practicing in Massachusetts under “Romneycare” while the other continues to work in Houston. The “Medicaid is broken” refrain is frequently sung, but we don’t hear a uniquely Texan solution that is fiscally responsible while also enhancing access to affordable coverage and quality care for Texans in need.
It is Texan presidents who drove landmark changes to the health care landscape. Lyndon B. Johnson set in motion legislation for Medicaid, and George W. Bush, as governor, signed the bill creating the Texas version of SCHIP, the State Children’s Health Insurance Program. Both programs give states the flexibility to administer programs to fit each state’s needs, providing essential health care to many Texas children and families.
Medicaid expansion described in the Affordable Care Act — to people living below 133 percent of the federal poverty level — builds off “Romneycare” in Massachusetts. The Blue Cross Blue Shield Foundation of Massachusetts found that, at the five-year mark, 66 percent of individuals, 52 percent of employers, and 88 percent of doctors support health care reform or think it was an improvement.The combination of Medicaid expansion and development of a health insurance exchange that reduced the uninsured to 2 percent did not result in the feared “crowd out.” Instead of employers offloading health insurance to public programs, there was an increase in employer-sponsored health insurance.
The lesson learned is that while Romneycare remains popular and insurance coverage increased, the already steep cost curve was not bent. Health care costs in Massachusetts are estimated to double by 2020. To address this, Massachusetts passed cost containment legislation last summer. We believe Texas leaders can do better and come up with a Texas solution that increases access and controls spending.
In April, the Legislature in neighboring Arkansas showed creativity in crafting a private market, pro-business, bipartisan plan to expand Medicaid. It was hailed by Arkansas Republican State Rep. Charlie Collins as a waiver to “transcend Obamacare.” A recent Forbes article described how the Arkansas plan will drive down costs through increased competition in an expanded marketplace. Arkansas created a “private option” that enables those in the Medicaid program to shop for private insurance. Rather than the traditional government-run entitlement program, the Arkansas plan supports the private market.
While Arkansas has found an answer to expanding coverage without exploding costs, Texas politicians stick to the “Medicaid is broken” mantra. As the second-most populous state in the union, Texans make up a large tax base to support Medicaid. Our leaders — the governor, the lieutenant governor and speaker of the House along with the Texas Legislature — have a duty to make sure Medicaid dollars paid into the federal coffers come back to serve Texans and support our economy, via jobs within our robust health care industry.
We read that for $15 billion of state money applied to Medicaid expansion over 10 years, Texas would receive about $100 billion back in Texas-paid federal money. The Perryman group, a Waco-based economic analysis firm, estimated that for every dollar spent by Texas for additional Medicaid coverage, the total spending in the economy would go up by $43 and retail sales would expand by $6. So, economics can’t explain rejecting Medicaid expansion.
Further, with over 1 in 4 Texans uninsured, Texas hospitals pick up the tab for patients who receive care but are unable to pay for it. Until now, “disproportionate share hospital” payments from Medicaid helped offset the costs, bringing close to a billion dollars to Texas hospitals in 2012. But this subsidy for uncompensated care was slashed since Medicaid expansion was expected to reduce the uninsured. Without Medicaid expansion, Texas hospitals will become increasingly burdened by the so-called free riders in the system. That means everyone — including those with commercial insurance — will pay higher prices to cover the costs of the uninsured and underinsured. By doing nothing, politicians ensure Texans’ tax dollars will distribute to other states to expand their Medicaid programs while we are stuck paying higher out-of-pocket costs.
The Texas Medical Association has proposed a better path forward. These physicians have chronicled the problems in the current Medicaid system and have called for solutions, not more rhetoric. Texas-style Medicaid expansion requires leadership, not political score-keeping. It makes sense for Texas to create a business-friendly solution that ensures hospitals and doctors get paid for care provided. Can Texas leaders come up with a smart solution, or are they “all hat and no cattle”?
Dr. Nehal is an academic pediatrician in Boston. Dr. Giardino is an academic pediatrician in Houston.