Texas Facing Medicaid Crunch

The last thing the state of Texas' Republican leadership wants to do is give in and accept the Medicaid expansion mandated by the Affordable Care Act. Texas has the largest uninsured population in the country, but no matter how many Texans might receive access to healthcare if the state would just take the federal money for the expansion, Governor Greg Abbott is not going to give into President Obama's signature achievement unless he's threatened with some really big consequences.

There's a chance — not a sure thing, but a chance — that those consequences could arrive this fall.

Because Texas has not expanded Medicaid, it needs the federal government to give it waiver in order for the state to receive the large chunk — about $4 billion — of the Medicaid money it still gets that goes toward paying for private hospital care for 4 million Texans. Texas' current waiver expires in the fall, but Texas Health and Human Services Executive Commissioner Chris Traylor told a Texas House committee meeting that he believes the state will get an extension on its waiver.

"I am more optimistic about getting a reasonable short-term extension on the waiver than I am about the Rangers making the World Series," Traylor said.

The Rangers are expected to be pretty good in 2016, so Traylor is pretty confident. He was less confident as to what might happen if the state can't get an extension on its waiver, telling state Representative Armando Walle that he doesn't know if any Texas hospitals would close if they stop receiving the Medicaid payments.

There's a chance that the federal government could use the waiver as leverage to get the state to accept some kind of Medicaid expansion. That's what happened last summer in Florida, when Governor Rick Scott refused to expand Medicaid and sued the United States over its refusal to continue funding Florida's program for low-income hospital patients unless the state did so. Scott eventually dropped the lawsuit, but the federal payments Florida was receiving were cut drastically. They'd been $2 billion in 2014, and will drop all the way to $600 million in 2017.

Abbott praised Scott for filing the lawsuit last April.

"When the federal government exceeds its constitutional authority, the states must take action. ... The Supreme Court made it very clear that the Constitution does not allow the federal government to use these coercive tactics against the States," he wrote, adding that Medicaid expansion is wrong for Texas

If Texas were to just expand Medicaid in 2016, the federal government would pay 100 percent of the cost of the additional coverage through 2020. After 2020, the feds would still cover 90 percent of the costs for the additional people insured.