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How Hospitals Are Asking the Legislature To Enhance Insurance Coverage

The state is facing what could be a multi-billion dollar budget deficit, but the Texas Hospital Association is still prioritizing expanded coverage amid the pandemic.
Elizabeth Lavin

The Texas Hospital Association is advocating for expanded health coverage, improved Medicaid reimbursement rates, and increased behavioral health funding as the 87th Texas Legislature convenes this month. 

The pandemic has created massive revenue shortfalls that could total $4.6 billion, so the ask for increased funding may be a tall order. Still, THA officials are optimistic that the health challenges wrought from the pandemic will increase the likelihood of advancing their goals. 

Medicaid expansion has become a dirty word for many of those with the power to bring bills to the Texas Legislature floor, even with ample evidence that expanding coverage could boost the state’s revenue. For several years, Texas has led the nation in the number (5 million), and rate (18 percent) of uninsured residents, and expanding the eligibility for Medicaid would not only give vulnerable populations access to regular healthcare, but decrease the amount of uncompensated care provided by hospitals to uninsured residents who have nowhere to go but the emergency room.

Pandemic-related job losses also have contributed to an increase in the number of uninsured residents. With federal money available to Texas, the state’s hospitals are pushing for an expansion of some sort. Because it’s such a hot button topic with many legislators, THA doesn’t always push the issue. But the pandemic has made expanding coverage an even greater priority.

“There are considerable federal funds that are available at an enhanced match rate that could potentially help the state’s budget situation,” says John Hawkins, THA’s senior vice president of government relations. “We think it’s probably a good time to revisit that issue.”

Hawkins says THA prefers a subsidized private market over a purely governmental model. Hawkins says THA supports something close to what the state of Arkansas has done, where Medicaid funds subsidize the purchase of insurance through commercial providers. Hawkins says this route would be an easier pill to swallow for many in the legislature and would benefit a more comprehensive network. Many providers don’t take Medicaid patients. 

“It is better benefits on the beneficiary side and a better provider network because the rates are higher than traditional Medicaid rates,” Hawkins says. “We think it’d be a good time to set politics aside and revisit it for the health and productivity of the populace as well as of potentially helping the state budget.”

The limited provider pool for Medicaid recipients is partly due to low Medicaid reimbursement rates, which is another policy priority for THA. During a session dealing with a deficit, Hawkins knows that the rates the state pay providers who see Medicaid patients are often on the chopping block. He is hoping for movement in the opposite direction. Reducing Medicaid reimbursement rates will only push more providers out of the Medicaid space, forcing patients to more expensive care options.

“The reality is that you rob Peter to pay Paul,” Hawkins says. “You’re potentially limiting services and forcing more people into the ER and higher costs.”

THA is also pushing for expanded behavioral health services, which has become a salient issue during the pandemic. Job loss, isolation, and anxiety have increased rates of depression across the country. Hawkins hopes that legislators might be open to a limited Medicaid expansion to expand coverage for the seriously mentally ill, giving them access to the care they need. 

Despite the budget deficits looming over a state legislature that must balance the budget, Hawkins remains positive. “We’re hopeful because I think the pandemic has shown that if we don’t invest in infrastructure, whether it’s public health or hospitals and health systems, it could be problematic when you have a global pandemic,” Hawkins says. “I think people see the value.”