In Case You Missed It: Perry Enjoys Accepting Additional Federal Funding For Texas’ Medicaid Program

Christopher Weaver reports that Texas’ request for a waiver for rerouting “federal funds the state would otherwise lose — an undesired consequence of expanding managed care — to subsidize hospitals’ uncompensated care costs” and finance “projects to help the uninsured” won’t make any real improvements in the state’s dilapidated health care system but could be enough to burnish Rick Perry’s conservative credentials with the Republican base. As Weaver puts it, “The initiative’s warm reception by Democrats and consumer advocates, and the federal funds it seeks, could add up to a political liability for Perry. His 2010 book, Fed Up!, rejects any whiff of federal money — and the rules that come with it.”

I would add that the waiver request and the federal governments initial approval of the project suggests that 1) the federal government is far more flexible in allowing states to design their Medicaid programs than Perry often suggests and 2) this is only the latest example of Perry thwarting his “anti-Washington” image and requesting additional federal funds.

In 2009 and then again in 2010, Perry publicly complained about the “strings attached” to the federal dollars associated with increasing Washington’s contribution to the Medicaid program, but ultimately took — even requested — the money. From the Texas’ Health and Human Services Commission website:

— SEPTEMBER 2009: The Center for Medicaid & Medicare Services (CMS) has notified HHSC that Texas qualified for Tier II FMAP reimbursement starting in July 2009. This allows the state to draw a higher federal match for Medicaid expenses. The Tier II federal match rate is 69.85 percent for Texas, up from the Tier I rate of 68.76 percent.

— JANUARY 2010: Texas Qualifies for Tier III Medicaid Match The Center for Medicaid & Medicare Services (CMS) notified HHSC that Texas qualified for Tier III FMAP reimbursement starting in October 2009. This adjustment is based on recent unemployment data and allows the state to draw a higher federal match for Medicaid expenses. The Tier III federal match rate is 70.94 percent for Texas, up from the Tier II rate of 69.85 percent.

— OCTOBER 2010: The ARRA FMAP was set to expire on December 31, 2010 but has been extended for six-months at phased-down rates. The phased-down state fiscal year 2011 FMAP rates are 68.11 percent from January 2011 through March 2011 and 66.23 percent from April 2011 through June 2011. With the FMAP extension, the average state fiscal year 2011 FMAP is 67.33 percent.

The original stimulus package included $87 billion in enhanced federal Medicaid funding, which meant that the federal government had increased its contribution to state Medicaid programs by 6.2 percentage points through Dec. 31, 2010. In August, at the request of 42 governors, Obama signed a six-month phase-out extension of that increase through June 2011.


Perry was one of eight Republican governors who didn’t publicly lobby for the additional dollars in February of 2010, but asked the federal government for the extra funds once they became available. A Perry spokesperson explained that Texans “paid their share of taxes and should get some of that money back” — which is the same argument that Democrats used to dissuade the governor from opting out of the program entirely.