With Gov. Perry and Lt. Gov. Dewhurst both on record in opposition, Medicaid expansion in Texas seems unlikely at best. But with increased chatter about it spreading throughout the Austin political machine like a contagion, a reminder of all the fiscal side effects associated with Medicaid expansion is just what the doctor….er… taxpayer ordered.

A diagnosis of our current condition:

Texas spends a quarter of the state budget (about $28 billion) just on its share of Medicaid.

Its current growth-trajectory will outpace other budget priorities such as transportation or education, forcing the state to devote fewer resources to them, or seek new revenues, likely in the form of higher taxes.

Doctors are increasingly refusing new Medicaid patients because of such poor reimbursement rates, averaging less than one half of what doctors usually charge. In other words, access to doctors is already becoming scarcer for those on Medicaid as the program stands now.

And by 2014, the 600,000 who are eligible for Medicaid, but have yet not enrolled, will be forced into the program by ObamaCare’s individual mandate – leaving it up to Texas to pick up the tab. By 2023, that comes out to an estimated $8.6 billion in additional costs on the state before even considering whether to expand Medicaid eligibility.

Medicaid as it is in place right now is only available to pregnant women, children, families in poverty and the disabled. Under ObamaCare, all non-disabled adults will become eligible if their income is under 138 percent of the federal poverty level. The full cost of these “expansion adults” facing Texas is $87.5 billion over the next decade.

Tell your legislators to say NO to the Medicaid Expansion poison pill! Side effects of Medicaid expansion include:

The first sign of Medicaid expansion taking effect is the $100 billion infusion of federal dollars (paid for in part by ObamaCare’s massive tax increase) into the state’s coffers. But what may sound like a cure-all to current problems with Medicaid is really nothing more than a poison pill.

The federal government has promised to cover 100 percent of the costs of newly eligible enrollees through 2016, but then promises only a 90 percent commitment after that.

If Texas had the flexibility to substantially reform Medicaid, that might not sound like such a bad deal. Unfortunately the federal government has left Texas with virtually no option whatsoever to keep costs under control, such as implementing an asset test to ensure applicants are truly eligible.

Of the $87.5 billion going to cover “expansion adults”, Texas can expect to pay anywhere from $7 to $10 Billion when it’s forced to pick up 10 percent of their bill after 2016.

Don’t expect any flexibility on eligibility criteria either. The Obama Administration has shown absolutely no desire to be flexible on the new eligibility criteria – meaning Texas either expand its Medicaid program to all adults under 138 percent of poverty or it gets no additional funding. And once you do, there’s no turning back.

Preventative measures:

The best way to avoid this multi-billion Medicaid boondoggle is to stay away from all considerations of expansion. Plain and simple.

Texas’s budget going forward cannot handle a swelling of Medicaid spending. With such rigid prohibitions on what the state can do even with its current system, an expanded Medicaid program will only grow like a tumor, crowding out other sectors of the budget such as education, transportation and public safety.

The top three statewide elected officials in Texas agree Medicaid expansion is bad policy.

Governor Rick Perry and Lt. Governor David Dewhurst have tried to inoculate the Legislature by making it clear they oppose any and all attempts to expand Medicaid.  Attorney General Greg Abbott warns that Texas would be “in for a penny, in for a pound” if they do expand it.

Sadly, House Speaker Joe Straus refuses to take such a stance, telling Evan Smith of the Texas Tribune, “we should have a conversation about it.”

Taxpayers cannot write off talks of Medicaid expansion simply because Texas is lead by Republicans. Just look at Ohio, where Republican Governor John Kasich is now asking his GOP-controlled Legislature to accept the Obama Administration’s expansion proposal.

We simply cannot afford to accept this Trojan Horse from the federal government. Tell your state legislators not to swallow the Medicaid expansion poison pill.

Dustin Matocha

Dustin Matocha is the CFO and COO of Texas Scorecard. Dustin graduated from the University of Texas at Austin with a BBA in Management, a BA in Government, and a minor in Marketing. He’s a self-described Corvette enthusiast, baseball purist, tech geek and growing connoisseur of local craft beer.


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