Texas Braces for Medicaid Status Quo

John Commins, June 5, 2013

By opting not to expand Medicaid, Texas is passing up an estimated $90 billion in federal funds over the coming decade, leaving its healthcare providers, especially hospitals, in a tough financial spot. Rural care facilities are especially vulnerable.

The Medicaid enrollment expansions that take effect on Jan. 1, 2014 under the Patient Protection and Affordable Care Act are expected to extend health insurance coverage to as many as 17 million Americans, depending upon who's doing the calculations and how many states eventually sign on.

For healthcare providers in most states, the expansion represents a windfall of billions of dollars. The federal government will pay for the entire cost of the expansion through 2016. After that, the cost will gradually shift toward the states, but the feds will still pay 90% of the cost after 2020.  

The expansion offers coverage to people who earn as much as 138% of the federal poverty level, which is $15,400 for one person and $31,800 for a family of four.  

Given that hospitals and healthcare are huge economic drivers, those new Medicaid dollars could prove to be as valuable for economic activity and job growth as they are for improving population health. The Medicaid money will also free up local property and sales taxes that would otherwise be used to prop up charity care.

Under such circumstances, expanding the Medicaid rolls would seem like a no brainer. After all, the need is already there. People are going to get sick and need medical care regardless of whether or not they are insured. That care is going to cost money. Medicaid expansion simply answers the question of who is going to pay for it.  

John Commins

John Commins is a senior editor at HealthLeaders Media.

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