HOUSTON — Gov. Rick Perry’s decision on July 9 to refuse two key provisions of the federal health care law — the expansion of Medicaid and the creation of a state insurance exchange — is already being fiercely debated by lawmakers in Austin. But the real impact of the move will be felt far from the Texas Capitol, in the chambers of the commissioners who oversee the state’s counties.
In Texas, the burden of paying for the health care of the uninsured falls largely on county residents, whose property taxes help support so-called safety-net hospitals like Ben Taub General Hospital in Houston and University Medical Center of El Paso. Last fiscal year, taxpayers in Houston’s Harris County supplied $504 million and those in El Paso County $54 million to maintain and operate the public hospital districts that treated uninsured Texans in the two counties.
Several local leaders, health policy analysts and officials at urban hospitals across the state said Mr. Perry’s decision to reject billions of federal dollars that Texas would receive in a Medicaid expansion would hurt county taxpayers and the hospitals they support, forcing them to continue to pick up much of the tab for treatment of the uninsured.
Last year, the El Paso County Hospital District, which includes University Medical Center, asked county commissioners to raise property taxes to make up for cuts to Medicaid passed by the State Legislature and to address the growing number of uninsured patients. The commissioners, including Daniel R. Haggerty, the lone Republican, approved the tax increase, the first the county had authorized for the hospital district in 22 years. The average increase for homeowners was about $13 a year.
“I understand the governor is probably trying to make a political move here,” Mr. Haggerty said. “He hasn’t got a clue as to what our situation is and what our problems are. He’s saying, ‘You guys figure it out.’ That’s fine. I understand how it works.”
Referring to the California city that voted this month to file for bankruptcy, Mr. Haggerty added, “I hope we can pull this off without pulling a San Bernardino and saying, ‘We’re bust.’ ”
In San Antonio, George B. Hernández Jr., the president and chief executive of University Health System, which is financed in part by Bexar County taxpayers and includes University Hospital, used the calculator on his iPhone to talk about the impact of Mr. Perry’s decision. The system runs a financial-assistance program called CareLink that subsidizes the costs of health care to the uninsured. Mr. Hernández said 26,600 CareLink members would qualify for coverage if Medicaid was expanded and would no longer rely on the county subsidies. The annual cost of CareLink is roughly $2,000 per member, so a Medicaid expansion in 2014 would save the system $53.2 million a year.
“There are consequences to it, and the consequences are to local taxpayers,” Mr. Hernández said of not expanding Medicaid. “There’s an opportunity for tax relief that we’re passing up.”
In rejecting Washington’s proposals in an interview on Fox News and in a letter to Kathleen Sebelius, the federal secretary of health and human services, Mr. Perry emphasized his philosophic opposition to expanding Medicaid and creating a state exchange, and did not address the financial concerns of county leaders and public hospital officials. The refusal was only the latest example of Mr. Perry’s long opposition to what he sees as the overreach of Washington into state affairs. In 2009, he rejected $556 million in federal stimulus money for the state’s unemployment insurance program, saying too many strings were attached.
“Every Texan has health care in this state,” Mr. Perry said on Fox News. “From the standpoint of being able to have access to health care, every Texan has that. How we pay for it and how we deliver it should be our decision, not some bureaucrat in Washington, D.C., that may have never been to Texas a day in their life or, for that matter, in any of the other 49 states, trying to mandate this one-size-fits-all health care.”
Among the states, Texas has the highest uninsured rate, 24 percent, and the second-highest number of uninsured residents, 5.6 million children and adults, according to state and federal health officials.
By expanding Medicaid, the government health-insurance program for low-income and sick people, and by creating an online exchange to help residents and small businesses buy health coverage, Texas would reduce the uninsured rate to 12 percent, or about 2.9 million residents, state health officials said.
The federal government would pay 100 percent of the cost of expanding Medicaid for the first three years, and in the years that followed, Texas would never pay more than 10 percent. The expanded program would cost the state roughly $16 billion over 10 years, not $26 billion as originally estimated, Thomas M. Suehs, the Texas health and human services commissioner, told a state House Appropriations Subcommittee on Thursday. Though the state would receive $100 billion in additional federal money in a Medicaid expansion over that period, Mr. Suehs said he agreed with the governor’s position.
“There’s enough money in the Medicaid system — we just don’t spend it very wisely,” he told legislators. “Let’s fix what we currently have first before you debate the issue of what you want to expand and how you want to expand.”
Community health advocates and others criticized the governor’s decision as long on talk but short on solutions or alternatives. Mr. Perry and his aides said he had indeed put forward a solution by calling on the federal government to allocate Medicaid financing as block grants so each state could tailor its Medicaid program to the needs of its residents. Lucy Nashed, a spokeswoman for Mr. Perry, said that in opposing the expansion of Medicaid, the governor had the concerns of taxpayers in mind.
“The bottom line is that whether at the federal, state or local level, expanding Medicaid under Obamacare would cost billions of tax dollars and increase the burden on hard-working taxpayers,” she said in a statement. “States and local governments can’t simply print money to cover the cost of this program when the federal government leaves us holding the bag.”
Despite Mr. Perry’s rejection of key components of President Obama’s health care overhaul, Texas and its residents continue to benefit from various federal programs created by the law.
From August 2010 to March 2012, the federal government paid more than $100 million in claims to about 5,100 Texans in the federally run Pre-existing Condition Insurance Plan, which provides health insurance to people denied coverage by private insurers because of pre-existing conditions like cancer or diabetes. And nearly two years before Mr. Perry formally turned down the creation of a health exchange, Texas was awarded a $1 million federal grant in 2010 to plan for one.
Texas later returned about $900,000 of that money, state and federal officials said.