To Help His State Budget, Gov. Rick Perry Wants To Hurt His State Budget By Opting Out Of Medicaid

Texas Governor Rick Perry (R) is a leader in the pack of “tenther” politicians who believe that pretty much everything the federal government does is unconstitutional. Hoping to start a “10th Amendment movement,” Perry has proposed opting out of Social Security, called constitutional amendments “mistaken“, and offered secession as a way to avoid the “oppressive” federal government. Particularly piqued by the passage of health care reform, Perry is now setting his “tenther” sights on a specific target: Medicaid.

As Mother Jones’s Suzy Khimm notes, “one of the hallmark accomplishments of health-care reform” was the expansion of Medicaid. Under the new health care law, new insurance subsidies “will add an estimated 16 million new Medicaid enrollees.” While many GOP and Democratic-led state governments oppose the expansion, Perry is pushing Texas to drop out of Medicaid entirely.

First floating the idea on CNN last Sunday, Perry told Fox News host Greta Van Susteren yesterday that states should “be given the opportunity to opt-out of the Medicaid program we are looking at today”:

VAN SUSTEREN: Health care, there’s going to be a lot of challenges in the next two years. What is your view of the health care program?

PERRY: I’d like to see states be given the opportunity to opt-out of the Medicaid program that we are looking at today. We think in Texas over the next six years that we could take and find a private insurance solution and better serve our people, put more people under coverage, and save $40 billion for the state of Texas and $40 billion for the federal government because it is a matching program.

Watch it (starting at 3:22):

As Khimm notes, Perry’s only “underlying rationale” for “sacrificing the health coverage” of Texas’s 3.6 million poor people dependent on Medicaid would be “if it solves the state’s budget crisis.” But as WonkRoom’s Igor Volsky explains, none of Perry’s proposal actually makes any sense. Rather than “bankrupting the state” as Perry’s legislative pals may claim, 95 percent of all new spending would actually be footed by the federal government. Indeed, as Health Beat’s Maggie Mahr notes, Texas would actually benefit more than most states because while Medicaid enrollment will rise by 46 percent, “state spending on Medicaid rises by about 3 percent. Meanwhile, Federal spending in Texas is expected to increase by 39 percent.”

Not only would Perry be turning away millions in federal spending, Perry would actually be “taking billions out of the state economy that goes on to support hospitals and other providers,” Volsky notes. Thus, “hospitals and doctors would have to swallow the costs of caring for uninsured individuals who will continue to use the emergency room as their primary source of care,” which further burdens the state budget.

The actual “lose-lose” outcome of Perry’s proposal has led many health policy experts to question its legitimacy and sincerity. Perry’s eagerness gut Medicaid while providing no actual viable alternative to cover the poor pushed one Texas hospital’s chief to call his idea “so bizarre as to be unworthy of consideration.”