Why Health Reform Is A Good Deal For Rick Perry’s Texas

NBC’s Carrie Dann and Matt Loffman are reporting that Rick Perry railed against the Affordable Care Act during a stop in Florence, South Carolina this morning, arguing that the law will bankrupt the states and promising to repeal it if he’s elected to the presidency:

“If I’m so fortunate to be elected the president of the United States, on Day One, when I walk into the Oval Office, there will be an executive order on that desk that eliminates as much of ObamaCare that I can have done with an executive order,” he said in remarks at at a hospital complex here. “Now hopefully, Lord willing, the 11th Court of Appeals has already found that that individual mandate is unconstitutional, and hopefully that will be gone to the Supreme Court, and I won’t have to deal with that.” […]

Perry also said the costs of implementing the health-care law would force Texas to raise taxes — and that other states will be bankrupted as a result of “ObamaCare.”

Perry may certainly disagree with the way the health care law expands coverage, but he can’t honestly say that Texas will go bankrupt if it implements the measure.

Consider the provision that Perry is most concerned about — expanding the Medicaid program to 133 percent of the federal poverty line. Texas, with its narrow Medicaid coverage levels, will experience large reductions in the uninsured and could see up to 1.4 million Texans enroll in the program by 2019.

Under the law, the federal government picks up the full costs of expansion for the first two years and the states begin contributing on a sliding scale thereafter. Fortunately for Texas, “states with low coverage levels today will see the vast majority of the costs of new enrollment financed by the federal government over the 2014 to 2019 period because most of their increased enrollment is from individuals made eligible by health reform who qualify for the high newly eligible match rate.” More federal dollars will be coming into the program and they’ll cover the overwhelming majority of the cost for the newly insured. The Kaiser Family Foundation estimates that if Texas experiences an enrollment increase of 46 percent, it will see a 39 percent spike in federal spending and just a 3 percent increase in state spending. That means that the federal government will be picking up 95 percent of the tab for Medicaid expansion between 2014 and 2019.

The states’ costs could also be offset. For instance, insuring more people means that the state would also have to spend less on uncompensated care and according to the Urban Institute, those costs could decline by 55 percent between 2014 and 2019, from $21.3 billion without reform to $9.6 billion with it. In fact, if the law is fully implemented, Urban estimates that state savings would exceed states’ new costs and Texas could actually achieve a savings of $554 million.