Fed Money Buys Time, Delays Hard Medicaid Choices for Texas Lawmakers

May 4, 2016

Now that Texas knows it will receive a Medicaid waiver for uncompensated care, state lawmakers are no longer on a tight deadline for figuring out what to do about its large uninsured population.

The federal government will continue to give the state billions of dollars to reimburse Texas hospitals to pay for care provided to people without insurance. But the deal only pushed the deadline back a year to December 2017, and advocates hope lawmakers will use that time to debate Medicaid expansion.


Anne Dunkelberg with the Center for Public Policy Priorities says there’s no doubt the Medicaid waiver extension was good news for health care providers in the state, but says the state still has to update its Medicaid implementation in light of the Affordable Care Act's passage. 

“I think it’s a terrible mistake to believe that it is going to change the ultimate course of sort of the modernizations of Medicaid that Texas needs to be looking at over the next few years,” Dunkelberg said.

The sticking point in that Affordable Care Act fight hinges on reimbursement. The state wants a Medicaid waiver to pay hospitals for taking care of people without health insurance, but the feds argue an expansion Medicaid under the ACA could mean a drop in uncompensated care costs. However, state lawmakers have to approve that expansion, and the state's conservative leadership has opposed expansion and all other parts of the law since it was passed.

Democratic Rep. Garnet Coleman of Houston says it’s time to revisit this conversation, and perhaps even find a middle ground by seeking an expansion “that respects the fact that we have conservative leadership in this state.”

Coleman hopes Medicaid coverage expansion becomes a big part of the conversation as state and federal health officials continue to meet over what to do with the state’s large uninsured population.

“These are ongoing discussions and they have to be because of the 1.1 million people who don’t have health insurance that could have it under a coverage expansion,” Coleman said. “And that is not solved until we figure out someway to work with our federal partners to do that. This is truly a band-aid for our hospitals, not a guarantee of a sustained dollars based on someone walking in with an insurance card.”

But the fact that the state has been successful in getting the federal government to extend the waiver could make Medicaid expansion a harder sell. Already, the state’s health care agency has said they hope to convince federal officials to give them yet another waiver extension after this one, says Bryan Black, a spokesman with the Texas Health and Human Services Commission.

“In the meantime, HHSC and [the Centers for Medicare & Medicaid Services] will continue to look at extending this possibly to another five years, we will just see how long that extension goes,” he said."

Federal health officials have warned that funding pools for programs in the state’s Medicaid waiver will start being phased out in 2018. State lawmakers don’t meet again until January of next year.