Texas' refusal to expand Medicaid hurts both hospitals and business community

The resistance to Medicare expansion by the state of Texas is carrying a heavy price--it will forego about $100 billion in federal funding over the next decade, as well as lost economic activity and billions of dollars in uncompensated care costs its hospitals must shoulder, National Public Radio (NPR) has reported.

Texas is hit particularly hard due to its demographics--one quarter of the nation's low-income uninsured reside in the Lone Star State. So its GOP-dominated legislature's refusal to expand Medicaid eligibility under the Affordable Care Act (ACA) comes at a big price for both its residents and its hospitals. The latter is on the hook for about $5.5 billion in uncompensated care annually, according to the publication.

Texas is one of 20 states that has so far refused to expand Medicaid, mostly for political reasons. In states that have expanded coverage for the poor, hospital operators such as Ascension Health say their facilities have seen a boost in revenue. A recent study of eight expansion states by the Robert Wood Johnson Foundation concluded each one enjoyed both additional revenue and fewer expenditures.

Hospitals in non-expansion states, such as Texas, have had a different experience. For example, NPR has reported that Parkland Hospital--the safety-net provider for Dallas County--spent as much as $750 million last year on uncompensated care for patients. "A huge chunk of that could be paid for. It's about $580 million a year that would be brought in by the Medicaid expansion monies," Clay Jenkins, the county judge who oversees the hospital, told NPR.

Meanwhile, healthcare insurance premiums in Texas are the second-highest in the nation, and its property taxes are third-highest. And some sectors of the business community are fuming that they are not getting any return for that. Bill Hammon, chief executive officer of the Texas Association of Business, told NPR that he believes that the Medicaid money could help the state's businesses invest in infrastructure and hire new employees. NPR reports that every dollar the state invests in Medicaid reaps a return of $1.30.

But Medicaid expansion remains politically suspicious in many states. Even an application for a 1115 waiver in Georgia, which would allow the Health and Human Services Department to waive certain Medicaid requirements and authorized expenditures, has come under intense political scrutiny, the Atlanta Journal-Constitution has reported.

To learn more:
- read the NPR report 
- check out the Atlanta Journal-Constitution article