Last week, I discussed Arizona and Gov. Jan Brewer's evolving plan to expand that state's Medicaid program, which now appears will be funded in part by a hospital bed tax. It was an abrupt but pragmatic about-face by a politician who had to provide an answer to hospitals--among the state's biggest employers--about how to handle rising levels of uncompensated care.
The picture is a lot different in nearby Texas. As you recall, Gov. Rick Perry torpedoed his presidential hopes when he lost track during a debate of all the government agencies he was fixing to shut down. Perry and his fellow Lone Star State politicians have used the same combination of swashbuckling and short-term memory loss to address the expansion of the Medicaid program in Texas.
Perry is adamant that Texas is not going to take as much as $1.2 trillion from the federal government over the next decade to expand the program, even though he governs a state where more than a quarter of its residents are uninsured--the highest rate in the nation. Perry compared doing so to adding more people to a sinking Titanic, although I have yet to hear of the Medicaid program catastrophically drowning its enrollees.
The Texas Hospital Association has been predictably unhappy about this stance: President Dan Stutz has told The Texas Tribune that "many will remain uninsured, seeking care in emergency rooms, shifting costs to the privately insured and increasing uncompensated care to healthcare providers." Which is exactly correct.
Of course, Perry and his colleagues in the Texas legislature know this, so they have been trying every other cost-cutting alternative to expanding Medicaid. That includes springing sick prisoners early so they won't have to pay for their medical care (another cost presumed to be shouldered by hospitals), and my favorite recent campaign: cracking down on unnecessary orthodontia for pediatric Medicaid enrollees.
Even if all these attempts are completely successful, they might save Texas $5 billion or $6 billion over the next several years--as opposed to the more than $100 billion a year the state would receive from the feds to expand Medicaid coverage. It's hard to forget or ignore this kind of math, but Perry has succeeded so far.
There are a few alternatives: For example, a Texas family earning less than $30,000 a year could buy fully-subsidized insurance on the exchange, but whether or not they will have the wherewithal to do so remains to be seen. Perry and the Texas lawmakers have been just as hostile to the exchange as they have been about Medicaid reform, and seeing them trying to push people to obtain coverage this way does not yet compute in my head.
The only good news for hospitals is the changing demographics in Texas. The state is becoming so heavily Latino so quickly that many pundits believe it could be a swing state as early as the 2016 presidential election.
Latinos have the highest rates of uninsured among all ethnic groups, so it is likely the pressure to relent on Medicaid will become extreme in the next few years.
Meanwhile, Perry's obstinacy to satisfy a dwindling block of voters will likely cost its hospitals billions of dollars over the coming years. I am certain they are not going to forget that. - Ron (@FierceHealth)