Monday, July 9, 2012

Gov. Perry Says He Will Continue To Shift Uninsured Health Care Costs To The Insured

Gov. Perry's office today sent a letter to U.S. Health and Human Services Secretary Kathleen Sebelius reaffirming his opposition to the Affordable Care Act.

Perry said in his letter, "I stand proudly with the growing chorus of governors who reject the Obama care power grab. Neither a 'state' exchange nor the expansion of Medicaid under this program would result in better 'patient protection' or in more 'affordable care.' They would only make Texas a mere appendage of the federal government when it comes to health care. "

If Gov. Perry has his way, Texas will neither expand Medicaid nor establish a health care insurance exchange, two major provisions of the Affordable Care Act. When the Supreme Court upheld the insurance mandate provision of the Patient Protection And Affordable Care Act, which the GOP calls "Obamacare," the court also ruled that states may decline to extend Medicaid coverage to 17 million Americans with incomes below 133 percent of the federal poverty level, which is $14,856 for an individual this year.

If Texas declines the federal funding to implement the Medicaid expansion program, up to 2 million Texans will remain uninsured, seeking care in emergency rooms, shifting costs to the privately insured and increasing uncompensated care costs to health care providers. According to a report published by Texas' Republican state Comptroller, Susan Combs, the state’s uncompensated acute-care hospital expenses (emergency room and other urgent care) totaled $460 per resident in 2006, not including uncompensated costs incurred by charitable clinics or physicians. The U.S. average for such costs was $287.57. The uncompensated care problem in Texas is exacerbated by the fact that uninsured individuals often delay seeking medical care, allowing their health problems to become more serious. By the time such individuals do seek treatment, their conditions may be much more costly to treat, driving uncompensated costs even higher. It is estimated the annual costs of such uncompensated care to run in excess of $10 billion.

By refusing to participate in federal Medicaid expansion, Perry, and the Republican controlled state legislature, will force local taxpayers to pay for otherwise uncompensated care provided hospitals, which will hike hospital district taxes. Health insurance premiums, for those lucky enough to have insurance, will increase, too. The Texas Hospital Association estimates that annual health premiums for an average Texas family are $1,551 higher due to the added costs of covering the uninsured.

According to the 2010 Census, Texas had the dubious distinction of having the highest rate of citizens who lack health insurance coverage. There were 6.1 million, or roughly 1 in every 4, Texans without health insurance in 2010, according to the Census. A recent Kaiser survey shows the uninsured rate unchanged at 25 percent, but as the state's population grows, so does the number of uninsured Texans. In comparison, 16.3% of people in the United States, or 49.9 million people, were not covered that year.

It seemed almost inconceivable that Texas and other states are planning to opt out of the expanded Medicaid program. After all, the federal government will pay the entire bill for three years of the expanded health insurance program for the poor, from 2014 to 2017, and then pick up at least 90 percent of the cost after that.

But a growing number of Republican governors and lawmakers, including those in Florida, Texas, and at least seven other states, have said they will reject the nearly $1 trillion in federal health care funding earmarked for their states. Up to 17 million people in those nine states, or more than half the total number of people expected to gain coverage under the Affordable Care Act, will be left without health insurance coverage.

In Texas, which has the nation’s highest rate of uninsured, the state is in line to receive $164 billion in federal health care dollars over a decade to cover an additional 2 million people through the expanded Medicaid program. Medicaid is jointly administered between states and the federal government, and the states are given considerable leeway to set eligibility rules. Currently, Texas covers only working adults up to 26 percent of the poverty line. The poverty line for an individual is $11,170. A single person making $3,000 a year is still not poor enough to qualify for Medicaid in Texas. That’s part of the reason Texas has the highest uninsured rate in the nation.

The states that get the best deal under the Affordable Care Act (ACA) are states like Texas, which currently have miserly Medicaid programs, but where the federal government will pay the entire bill for three years, and then pick up at least 90 percent of the cost after that for insuring millions more people. In other words, the less a state is currently contributing to Medicaid, the more money the federal government will funnel into the state under the ACA.

Texas' share of the expanded program cost is estimated at $27 billion over the next ten years. But Texas Republicans are looking to shrink Medicaid, not expand it, on ideological grounds.

On June 28, 2011 Gov. Perry signed a $172 billion budget passed by the super Republican majority Texas House and Senate that slashed $2 billion from the state's Medicaid and food stamp program, and under-funded the state’s projected Medicaid costs by about another $5 billion.

Gov. Rick Perry (R) and other leading Republicans would prefer for the state to opt out of Social Security, Medicare and Medicaid, altogether. In an interview with the Daily Beast’s Andrew Romano last year, Perry even claimed that Social Security and Medicare are unconstitutional.

Charles Begley, professor of management, policy and community health at the University of Texas, predicts state officials will try to negotiate a smaller expansion, perhaps up to 90 percent of the poverty level, rather than the 133 percent called for in the law.

“The GOP in Texas will say we can’t fund the current Medicaid program, and they won’t want to spend more money on the program than it has to,” he said.

But hospitals, doctors and insurers are likely to bring strong pressure on Gov. Perry and other Republican lawmakers to accept at least some of the expansion, according to Begley. Providers want the expansion to help pay for their treatment of the uninsured. Insurers want it because states are increasingly shifting Medicaid enrollees into private managed care plans which they operate.


On the exchange, Perry may not understand the policy details, but by refusing to create a marketplace where private insurers can compete for customers' business, he's simply inviting more federal control over Texas' health care system. [If the state doesn't create an exchange for Texans, the federal government will.] Why the governor wants Washington to set up Texas' exchange for Texans remains unclear. For that matter, the fact that Perry thinks competition between private insurers is tantamount to "socializing" suggests someone might want to buy the poor guy a dictionary.

But it's the Medicaid decision that arguably matters most. Again, it's not at all clear if Perry understands the policy consequences of his posturing, but the Texas governor is effectively announcing that Texas hospitals will lose nearly $1 billion in funding for one reason: Perry wants fewer poor people in his state to be able to see a doctor.

Perry's "plan," in other words, is to make Texas hospitals and struggling Texas families suffer because he has an ideological axe to grind and may want to run for president again in 2016.

Nearly every Republican running for Congress this year has vowed to repeal Obamacare and more than one-third of all Republican TV spots say Obamacare repeal is a major objective of the Republican Party. GOP leadership in the U.S. House has embraced a “repeal-and-replace” platform in its governing manifesto, “A Pledge to America.” And the Texas GOP Platform demands the "immediate repeal" of the Patient Protection And Affordable Care Act.

Chief of Staff Jack Lew said recently on This Week With George Stephanopolous that he expects “the vast majority of states” to expand Medicaid. “For those few that are slow to come in, they're going to have to answer to people why they're turning this down and why they're letting people go without coverage.” What will the answer be in Texas?

Click Here for some of the private health insurance industry reforms mandated in the "Obamacare" Affordable Care Act that Republicans want to repeal.


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