ACA Medicaid Coverage Opportunity the Best Deal for Texas Taxpayers

Texans aren’t the only ones thinking about the great fiscal deal the now-optional ACA Medicaid expansion would be for our state.  The Atlantic’s Jordan Weissman blogged last week, using Texas to illustrate the huge expansion of coverage and bargain price tag the opportunity offers.

If you have seen these county-level ACA fact sheets, then you know Texas Medicaid officials predict we would spend $1.3 billion from 2014-2017, and gain $25.3 billion in federal dollars to cover over a million low-income adults (parents of the 2.6 million kids now covered in Texas Medicaid, plus other poor adults without children at home).  Texas officials also say over 400,000 already-eligible but now-uninsured children will also sign up for Medicaid during those years, costing the state another $1.8 billion because the federal match for them is at the lower “regular” Texas Medicaid match rate, where we pay about 39 cents on dollar.  Weissman comments on a new 50-state report from the Kaiser Foundation, with numbers that don’t precisely match but are very much in line with the HHSC predictions.

Here the story takes a surprising twist.  Both national experts and Texas HHSC say that a large part—maybe even ALL—of the “welcome mat” surge in children who sign up for Medicaid when the big ACA coverage expansions start in 2014 will sign up whether or not a state allows the Medicaid expansion for adults!  While most experts agree that kids’ sign-up will be largest if the whole family can enroll, the welcome mat research is strong enough that Texas Medicaid officials built the increase in children into their budget for 2014-2015, even though they do not assume the adult coverage expansion or ask for any funds for those adults.

So the KFF focus is this:  states will get these new Medicaid kids anyway, but if the state also accepts the adult expansion it can cover well over a million uninsured at a lower per-capita cost.  Why?  Mainly the over nine-to-one federal dollar match for the adults—with zero state costs for 3 years and a maximum 10% share starting 2020—a much better deal than the current 39%.  But in Texas we will also see savings in locally-funded uncompensated care for hospitals, reduced local and state mental health spending, reduced criminal justice costs, and higher insurance premium tax and drug manufacturer rebate revenues for the state.

Key to understanding this argument is the fact that very few if any other states will pass on this opportunity, and Texans will not get a break on our federal taxes if our lawmakers stop these federal funds from coming to our communities.  As Weissman says, even lawmakers who don’t much believe in government’s role in access to affordable care or building a strong safety net might still believe “in retrieving as much of their citizens’ tax dollars as they can.”

Written by: Anne Dunkelbergassociate director at the Center for Public Policy Priorities. Cross-posted from the Better Texas Blog

Posted in The Texas Treatment|Tagged , , , , |

2 responses to “ACA Medicaid Coverage Opportunity the Best Deal for Texas Taxpayers”

  1. Cheryl Carlson says:

    Uninsured rate will stay where as is as long as Perry has any sway,women and children are not cost effective commodities in his world.He does not care,will not change,he is insulated.
    I want to know why children taken into fostercare in TX are put on Medicaid even when they are fully covered by parents privately paid coverage. They are not taken to their own MD,but delayed til Medicaid covered and taken to Medicaid MD.

    • AlexaGD says:


      Thanks for reaching out. Stacey Pogue at CPPP did a paper on this that you can find here:

      Basically, when a child come into foster care, they move to the state’s foster care health care system. The state won’t have money for deductibles and co-pays under private insurance to go to the previous doctors who probably don’t take Medicaid but in any case are very unlikely to be part of the special foster care health system. Medicaid should look to any private coverage to pay its share of costs though, so the private insurance can still be tapped.

      The child also isn’t likely to be placed near the old network for doctors. And those doctors may be witnesses in the case, making their continued treatment of the child potentially inappropriate. Certainly new doctors should have access to and review the child’s records. And if there were some specialty doctor treating the child, special arrangements might be made.

      Generally though the state has a special system for foster children with special procedures, training, and monitoring. Eligibility is categorical so there are no delays caused by getting into Medicaid. If you are in foster care, you are in the health care system.

      Please let us know how else we can help.

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