Cash-strapped states want to ditch Medicaid

Budget woes are spurring states to consider dropping Medicaid, according to Kaiser Health News and the Texas Tribune.

Conservative lawmakers in about a dozen states--including Texas, Alabama, Mississippi and Washington--see opting out of the federal Medicaid program as a way to deal with budget pressures and the costs associated with meeting the requirements of the federal healthcare overhaul. Many state governments complain that the expansion of Medicaid, which is expected to add 16 million new enrollees, will put their already cash-strapped budgets into even more dire straits, the Washington Post reports.

"States feel like their backs are against the wall, so this is the nuclear option for them," said Christie Herrera, a director with the American Legislative Exchange Council, an association for conservative state lawmakers. She said she's hearing chatter from legislators around the country who are considering opting out.

In the Texas State House, a larger majority of Republicans contend that states could provide more efficient care by giving up federal matching money entirely, or having federal officials grant states waivers to provide healthcare in a different way. Options that have been floated in several states include remaking Medicaid into a state-financed plan only to give states more flexibility in benefit and cost design. Texas currently is facing a budget gap estimated at $25 billion.

Opponents to dropping Medicaid say the idea is anti-Washington grandstanding that could hurt the health of 3.6 million Texans who are current enrollees. Without the 60 percent of Texas' $45 billion biennial Medicaid budget coming from the feds, there could be unintended consequences. "This will raise local property taxes because hospital emergency rooms can't turn away patients," said Regina Rogoff, executive director of the safety-net People's Community Clinic in Austin. "And it has the implication of us paying, through federal taxes, to subsidize care in other states, leaving people who live in our state without care."

Proponents of opting out aren't necessarily that worried about the latter. "If people are in superbad poverty, that's one thing," said State Rep. Warren Chisum, a Republican who is the state's biggest supporter of opting out of Medicaid and a candidate for Speaker of the House. "It breaks my heart when there's someone who smokes, and who stays drunk half the time, and we're supposed to provide their healthcare."

To learn more:
- read the Kaiser Health News/Texas Tribune article
- check out this Washington Post piece