State Presentation on the Affordable Care Act

Posted by Henry, on Mon August 13 2012 at 03:17 PM

For the second time in three weeks, state officials with oversight of the budget, insurance and Medicaid programs took testimony from agency leaders on how the federal Affordable Care Act (ACA) will affect insurance coverage, the Medicaid program and the state budget.

Members of the Senate’s Health and Human Services and State Affairs committees took more than four hours to discuss those issues with Insurance Commissioner Eleanor Kitzman and Health and Human Services Commissioner Tom Suehs.

Kitzman said that even though Governor Rick Perry has decided not to authorize a state insurance exchange – a marketplace for people without employer provided insurance to shop and compare available plans – there will still be required interaction with the federal government.

Suehs laid out current projections of state Medicaid costs and how many people might receive some kind of coverage, based on which choices were made about ACA implementation.

State estimates of future Medicaid costs have dropped since the 82nd Legislative Session ended last summer. Suehs said the state’s uninsured population – estimated at 5.5 million people, 24 percent of the total—could drop to 12 percent uninsured if the federal law were fully implemented.

As noted in his presentation some of the reduction will occur because some uninsured individuals will respond to the law’s requirement that they have insurance by, well, purchasing insurance. Others will take advantage of Medicaid’s more generous benefits and enroll in the program. That will leave, if the law isn’t fully implemented, about 3.8 million uninsured, a population that would include the state’s estimated 850,000 undocumented workers – about 3 percent of the total population – along with a large swath of adults who will not be covered because Medicaid didn’t expand, and some who still are eligible but won’t enroll in the program.

Suehs noted that even if the ACA didn’t exist, Texas Medicaid costs are estimated to rise from a projected $11.1 billion in 2013 to more than $14 billion in 2017. Full implementation of the federal law would take that cost to $16.4 billion in 2017. In the short run, some of those expanded costs would be subsidized by additional federal dollars, but that would not continue beyond the next 3-5 years.

Suehs, who is retiring after more than 35 years at HHS, told senators, as he had House members earlier, that if the state were allowed more freedom in administering the program, more people could get care.

“We must make Medicaid a more efficient system,” he said, “before we have a legitimate debate about whether we expand care or not.”

He was challenged by Jose Rodriguez, a Democrat from El Paso, who said some of the objections raised by the agency were “nit-picking…to avoid implementing the law.”

During the mid-July House hearing, Democrats focused on access to medical care and Republicans asked almost exclusively about costs. For the Senate hearing, the pattern was similar though most of the two panels’ Republican members weren’t there.

Suehs has been careful to lay out options without endorsing a proposal, other than to say he supports Perry’s rejection of expanded Medicaid until the system can be made more efficient. But, since announcing his retirement, he has noted that legislators have been avoiding hard decisions. Lawmakers left a hole in the existing state budget that will have to be filled by March of 2013 – to the tune of about $4 billion—to cover the current Medicaid costs.

“To be honest, the legislature’s record on Graduate Medical Education’s not too good, either” Suehs said, suggesting they restore funding cut from the GME program.

It’s a known occurrence that many medical students are doing their final residencies out of state. Studies show that where doctors finish their education is often where they stay, exacerbating a shortage in medical professionals in Texas.

Suehs also noted that the public hospital systems, such as the Tarrant County Hospital District and its anchor hospital, John Peter Smith in Fort Worth, are in the cross-hairs without so far getting much public attention.

“Without expansion, that’s 3 million uninsured,” Suehs said, “that’s larger than 25 or 26 states. That population goes to your safety-net hospitals.”

Without full Medicaid expansion, those hospitals will be further strained to meet the demand for health care, he said. Most funding for public hospital systems comes from property taxes, and most of the hospitals are in large, metropolitan areas. 

“The local communities will end up catching the lion’s share of the state’s obligations,” said Senator Kirk Watson, a Democrat from Austin, “and the local taxpayers will bear the brunt.”

Because of proposed changes to the way the state matches federal dollars for Medicaid patients, private, not-for-profit hospitals that currently get state help to back up the public system could receive substantially less state support. 

“I believe the legislature can’t leave town in 2013 without a long-range strategy to address uncompensated care,” Suehs said.

Since there has been virtually no discussion of that issue during this year’s election campaigns, it’s difficult to see how a Legislature with a huge influx of inexperienced and ideologically committed members will be able to address that issue.

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