Adamantly opposed to expanding Medicaid coverage under President Barack Obama’s signature health care law, Gov. Rick Perry and Lt. Gov. David Dewhurst had seemingly squelched efforts this legislative session to insure an additional 1.1 million low-income Texans under the Affordable Care Act.
But a determined campaign, targeting legislators with public pressure and private persuasion, has kept the issue alive by framing Medicaid expansion as an economic bonanza and tax-relief opportunity that would bring $79 billion in much-needed federal money over 10 years.
The arguments, pitched to Republican ears, have carved out a small space in which lawmakers can work toward an agreement that once appeared impossible.
Several key GOP legislators, though skeptical about expanding Medicaid, haven’t ruled out the possibility of a compromise, provided they can get several important concessions. Democrats are ready to deal.
“I’m tempering my rhetoric,” said state Sen. Rodney Ellis, D-Houston. “I don’t want to say anything that backs them in a corner. I want to get this done.”
Medicaid is a federal-state insurance program designed to help vulnerable populations — children and low-income families, elderly and disabled Texans, pregnant women, and children in foster care.
Under the Affordable Care Act’s goal of insuring more Americans, the federal government would pick up most of the tab if Texas extended Medicaid to a new population — childless adults who make less than 138 percent of the federal poverty level, or $15,415 per year.
According to estimates, Texas would spend $8.8 billion to receive $79 billion from 2014-23. The expansion would insure an estimated 1.1 million to 1.5 million Texans, taking a sizable chunk out of the state’s nearly 6 million uninsured residents.
Perry flatly dismissed the offer, calling it a bad investment in a broken system that is eating an ever-larger hole in the state budget. For the same reasons, Dewhurst, who leads the Senate, declared Medicaid expansion “off the table” this session.
House Speaker Joe Straus, however, has indicated a willingness to discuss whether the expansion makes business sense.
In that vein, expansion supporters have released two attention-getting studies:
• Perryman Group economists concluded that expanding Medicaid would pay for itself by generating $256 billion in economic activity over 10 years, creating about 300,000 jobs and boosting productivity from a healthier work force.
• Tax policy consultant Billy Hamilton concluded that the expansion would generate 261,000 well-paying health care jobs by 2016 and substantially relieve the tax burden — borne by cities, counties and hospital districts — for the health care costs of low-income, uninsured residents.
To further drive the point home, each legislator this week will receive a summary of the positive tax impact that expansion could have on their district, said Bee Moorhead, executive director of Texas Impact, a coalition of religious leaders and organizations that commissioned Hamilton’s study.
For example, in the Fort Bend County district of a key Republican on health issues, state Rep. John Zerwas, local governments spent $4.3 million on health care for low-income residents in 2011. Expanding Medicaid could bring in about $16 million in new local tax revenue for 2014-17, according to Texas Impact.
“This is the issue,” Moorhead said. “For years and years, Texas has had a faux policy of health care” that shunted low-income Texans into hospitals for care paid for by local taxpayers and hospital owners.
Last week, the Austin City Council voted unanimously to push the Legislature toward expanding Medicaid, echoing a similar call by Dallas County. Influential lobbying groups also have joined in, including the Texas Medical Association, which recently endorsed expansion if accompanied by reforms that include cutting red tape and increasing provider payments.
Zerwas, a medical doctor, said he is feeling the pressure to reverse his opposition.
“Absolutely. If you talk to hospitals, if you talk to counties, there is a substantial amount of money that is promised in the law that would benefit Texans. We do have a substantial uninsured problem,” Zerwas said.
But, he added, the expansion as proposed would be a Band-Aid solution, stressing an unsustainable Medicaid system that has grown so large it threatens spending on education, roads and other vital programs.
Still, Zerwas said there could be room to negotiate if Texas wins important concessions from the federal government to create a flexible system. The amount of needed flexibility “remains to be defined,” he said, but could include running the expansion program as a health maintenance organization and requiring co-pays.
Houston’s Rep. Garnet Coleman, one of the Capitol’s leading Democrats on health care issues, is fine with requiring co-pays and similar concessions.
Coleman, however, draws the line at attempts to use expansion as an opportunity to change Medicaid’s promise to children and disabled and elderly Texans. Talk of adding flexibility, he said, has often meant cutting people and services from the Medicaid system.
“Those of us who support the Medicaid expansion, we can walk away from the table, too, if we don’t think what is proposed is good for our constituents. This is a two-way street,” he said.
The economic arguments are strong enough to push Republicans to negotiate, Coleman said, noting that similar considerations have led Republican governors in six states, including neighboring New Mexico, to reverse their opposition to Medicaid expansion.
But pressure is coming from the opposite direction as well. Influential conservative groups such as Empower Texans and the Texas Public Policy Foundation have redoubled efforts to oppose expanding Medicaid, a system they consider to be broken and failing.
And, in the end, any expansion plan would have to survive Perry’s veto, a power the governor hasn’t been hesitant to use.