Texas public policy foundation
Texas Should Not Expand Medicaid
 
COMMENTARY
 

This article originally appeared in the Texas Tribune on 2/26/2013.

The Texas Medicaid program is an indispensable part of the health care safety net for our state's neediest, most vulnerable residents. State lawmakers have a responsibility to ensure that it delivers quality coverage and adequate access to care for those who rely on it, and also that the taxpayer-funded program is efficient and sustainable over the long term.

That is precisely why they should not expand it.

Put bluntly, Medicaid provides the worst health care outcomes in the country at the worst value to taxpayers. Providers in Texas have been abandoning the program for years, citing low reimbursement rates and burdensome federal red tape. Today, seventy percent of Texas physicians refuse to accept new Medicaid patients, and beneficiaries find it increasingly difficult to find a doctor who will see them. Instead, they seek out primary care in hospital emergency rooms, driving up the cost of uncompensated charity care, which now totals about $5 billion a year in Texas.

Proponents of expansion often cite uncompensated care as a reason to expand Medicaid, arguing that more people on Medicaid will mean fewer unreimbursed costs for hospitals. But the problem is more complicated than that. The cost of unreimbursed care comes not only from treating the uninsured, but also from treating Medicaid patients, for whom hospitals are typically paid about 50 cents on the dollar compared to private insurance. To make up the difference, hospitals receive local and federal tax dollars, but they also recoup costs by charging more to private insurance, which in turn increases insurance premiums for everyone.

By adding an estimated 1.5 million people to the program, it is likely that expansion will increase, not decrease, uncompensated care costs in Texas, as an influx of Medicaid enrollees discover that the only place they can reliably get health care is in a hospital emergency room.

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