The initial controversies surrounding the Patient Protection and Affordable Care Act are giving way to other issues surrounding its implementation, defining this moment as a key time for Texas leadership to address a new health care economics equation.
In Texas, the immediate concern involves the state Medicaid program. PPACA required states to expand their Medicaid programs to include individuals with incomes up to 133 percent of the federal poverty level – approximately $30,657 annually for a family of four. For Texas, this expansion was expected to introduce more than 1.2 million newly eligible enrollees in 2014 alone. While the U.S. Supreme Court ruled that states have the option to expand their Medicaid programs, there is no enforceable requirement, and Gov. Rick Perry said that Texas will not expand its Medicaid program.
Under PPACA, the federal government will pay 100 percent of the costs of care for those who are newly eligible for Medicaid from 2014 through 2016. In 2017, the federal share begins decreasing but never falls below 90 percent. Texas stands to lose more any than other state. Among the 26 states that challenged the PPACA, 22.2 percent of the new Medicaid federal dollars would come to Texas over five years, according to a Bloomberg Government study.
We must be clear that these federal funds come from taxes Texans will pay. If we don’t take the money, other states will. More than $100.1 billion in these federal funds could be available to Texas from 2014 through 2024 with just $15.6 billion put up in matching funds by the state, according to the Texas Health and Human Services Commission. With a strained state budget, it’s hard to imagine addressing the uninsured problem in Texas without leveraging these federal funds, which now will go to other states.
Hospitals share Governor Perry’s concerns about the financial impact of Medicaid expansion on the state. Without Medicaid expansion, however, many patients will remain uninsured, seek care in emergency rooms, increase health care providers’ uncompensated care, and shift costs to the privately insured. According to the Center for American Progress Action Fund, privately insured Texas families pay $1,800 a year in additional insurance premiums to cover uncompensated care costs for uninsured patients treated in a hospital. These additional premium costs to Texas families are higher than those in 45 other states.
Texas hospitals see Governor Perry’s engagement in this issue as an opportunity to improve the Medicaid program and address the uninsured problem within the state. According to The Dallas Morning News, a representative in Governor Perry’s office said he understands the “strain on hospitals from providing uncompensated care” and will work with state lawmakers and stakeholders to find a solution.
These are welcome words. Texas needs its leadership to address the heavy costs of the uninsured. Texas hospitals would welcome the introduction of a blue ribbon panel of health care and state leaders to bring these solutions to the forefront.
In the long term, we should continue to find ways to address these challenges and improve our health care system. We all have a role to play.
• State and federal governments can remove regulatory barriers and provide incentives to better coordinate care among health care providers.
• Hospitals, physicians, and others can implement evidence based best practices to improve quality and reduce costs.
• Those who can afford insurance should choose to purchase it, and make responsible choices about the care they receive.
• Employers should consider the benefits of having an insured and healthy workforce.
As I traveled around the state over the last two years talking about PPACA, I always emphasized that this law was never meant to fix all the problems we face. Challenges remain. True leadership is needed to address our uninsured population and to reform Medicaid so that the program is solvent. Texas hospitals look forward to a continued discussion with lawmakers, policy experts and the community about how we can all do our part to ensure a sustainable health care system.
Dan Stultz, M.D., FACHE, FACP, serves as Texas Hospital Association president/chief executive officer.