The Texas Hospital Association announced a campaign Monday to urge support of a plan to use federal dollars to fund a private health insurance program for the estimated 1.3 million Texans who make too much to qualify for Medicaid but not enough to receive a subsidy through the federal exchanges.
The campaign, coined The Texas Way, is an effort between the THA, business leaders, and civic groups to push politicians to accept $100 billion from the feds over the next 10 years to pay for insurance for the working poor without expanding the Medicaid program.
“Basically, the idea is the state would use the federal funds to finance a Health Savings Account for the beneficiary and then that would give them the incentive to better manage their healthcare choices,” said John Hawkins, senior vice president of policy for the Texas Hospital Association.
An estimated 24.6 percent of Texans lack insurance, giving the state the dubious distinction of the country’s most dismal uninsured rate. An estimated 1.3 million Texans fall into the coverage gap that would be erased if lawmakers voted to expand Medicaid. The federal government would pick up the tab for the first year and 90 percent of it in the years that follow.
But the Republican supermajority has derided expanding the program as a “one-size-fits-all” federal mandate that would not work for Texas. Texas hospitals fork over about $5.5 billion each year in uncompensated care to the uninsured.
Meanwhile, the THA and other stakeholders have accepted that Medicaid expansion isn’t likely, especially after last week’s election, which saw Attorney General Greg Abbott win the governor’s seat and state Sen. Dan Patrick (R-Houston) take lieutenant governor. Both have been outspoken in their opposition, and Patrick now has the power to direct legislation to the floor.
In August, high ranking officials in six of the state’s most populous counties urged lawmakers to come up with a “Texas way” to “fund and increase access to healthcare coverage for low-wage working Texans,” especially considering the unlikelihood of Medicaid expansion.
The THA’s campaign is only the beginning. No legislation has been filed—although, to be fair, Monday was just the first day to do so, and Democrat Trey Martinez Fischer of San Antonio did file one to expand Medicaid—and Hawkins says the process of discussing it with lawmakers is ongoing. The plan will require the state to request a waiver from the Centers for Medicare and Medicaid Services because it’s using federal funds allotted to expand Medicaid to instead pay for private options for the same populous.
“Right now, we’re trying to advance the concept,” Hawkins said. “Obviously, we wanted to see how last Tuesday shook out, so we’re in the evaluation phase right now of what the best plan might be on this.”
Other states have managed to get the federal government to approve plans similar to this. Most notably, perhaps, is Arkansas, which uses federal dollars to pay for private plans. But that program is over budget and now at risk. The THA’s differs in that it creates a Health Savings Account for the purchaser. Hawkins says he hopes this will incentivize purchasers to monitor their own health and keep costs low by incorporating a wellness program. It’s more similar to proposals in Iowa, Pennsylvania, Indiana, and Utah, he says.
“I think what we’ve seen states do is kind of reduce the cost sharing over time if you take care of some of the wellness components,” Hawkins said. “If you get appropriate primary care visits and manage your cholesterol and things of that nature you can reduce the cost sharing over time.”