Last month, Gov. Rick Perry (R-TX) took to the airwaves to suggest that Texas — which has the highest uninsurance rate in the country — would be better off if it sent back the matching fund it receives from the federal government to fund its Medicaid program and instead developed a new more efficient alternative to cover lower income residents. “We understand that’s our money,” Perry explained to CNN’s Candy Crowley on November 9th. “We send hundreds of billions of dollars to Washington, DC, and generally don’t get much of it back. We’d just as soon not send as much money to Washington, DC. Let us come up with the idea. I can promise you Pawlenty and Jindal and Barbour and some Democrat governors across this country as well will come up with really good ideas about how to deliver health care.”
Well now, a report by the Texas Health and Human Services Commission and the Texas Department of Insurance has panned the “good” idea, causing Perry to also back away from “his call to leave the federal system.” According to the findings, if Texas opted out of Medicaid:
- Texas would lose $15 billion (SFY 2009) in federal matching funds for client services and hospitals.
- At the same time, Texas residents and businesses would continue to pay federal taxes in support of other states’ Medicaid spending.
- Up to 2.6 million Texans could become uninsured.
- Hospitals still would be required by federal law to treat medical emergencies of uninsured former Medicaid and CHIP clients, potentially adding billions to uncompensated care costs each year.
- The Legislature could preserve benefits for some current Medicaid and CHIP clients using the state share of funding while shielding the state budget from significant losses, but it will be difficult to accomplish these two goals without shifting costs to county governments and public hospitals.
In a statement issued following the release of the report, Perry again called for greater state flexibility in the Medicaid program, but did not mention the idea of opting out entirely. He asked Congress to change the Medicaid funding structure to provide the state with “block granting funds to the states, so we can tailor Medicaid dollars to best serve the needs of Texas patients, families and taxpayers.” But that idea is almost as bad as his old one.