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Insurance & Benefits

Why Didn’t Texas Expand Medicaid This Legislative Session?

The data says it's a win-win. It would have passed in the House had it made it to the floor. So what happened?

Another legislative session has come and gone, and Texas remains one of 12 states to limit Medicaid coverage for adults, despite studies that demonstrate its benefits to Texans as well as the state’s budget. In addition to several reports that justify expansion, the move has broad public, statewide support. But at the end of the 2021 legislative session, no healthcare expansion of any kind got anywhere near becoming law. 

Opponents lament the cost of expanding Medicaid in Texas, but this year, the Biden administration sweetened the deal for expansion with its American Rescue Plan Act. The bill encourages states to expand healthcare coverage for adults up to age 65 with incomes at or below 138 percent of the federal poverty level, which is $30,305 for a family of three in 2021. For states that expand coverage, the ARP provides bonus funding to states, in addition to the funding that is there for the taking now. As of now, for every 10 percent that Texas contributes toward healthcare expansion, the federal government will provide 90 percent to get to what is needed. 

ARP will increase the federal contribution to Medicaid from 60 to 65 percent for two years for states that expand coverage. Those funds would apply to Texas’ current Medicaid population for those two years, which is now 4.2 million Texans, not the newly covered individuals.

Without insurance, individuals don’t get medical attention until it is absolutely necessary, and often expensive for the system and devastating for the individual. As of now, Medicaid in Texas is only available for a family of two if they make less than $200 a month or $300 a month for a family of four, but the expansion would grant coverage to people making $1,500 per month for an individual and about $3,000 per month for a family of four. 

A Commonwealth Fund report is the latest study to show the benefits of expanding coverage in Texas and other states. The report estimates 1.7 million people will become insured should Texas expand coverage, reducing the number of uninsured Texans. Texas has both the most uninsured people (around 20 million) and the highest rate of uninsured individuals (about 18 percent) in the country.

The report says that expanding coverage will generate more than $15.5 billion in revenue for Texas by 2025 because of the multiplier effect of the investment in people’s healthcare, which means more jobs and development. It estimates that Texas would add nearly 300,000 jobs across industries including healthcare, construction, finance, and retail. The infusion in federal money and improved health output would generate $28 billion in gross output and more than $19 billion in personal income gains in the state. 

Coming off the greatest pandemic in a lifetime, which also devastated the economy, one might think that approving expanded coverage (as New Mexico, Louisiana, Arkansas, and Oklahoma have already done) is a no-brainer. Allowing nearly two million Texans to have regular healthcare, while generating revenue from downstream health costs and creating a net positive for economic growth, seems to check off enough boxes upon which Republicans and Democrats can both agree. But as this year’s session comes to a close, Medicaid expansion fell short again. 

The latest Medicaid expansion bills in the Texas Senate and House are SB 117  and HB 3871 respectively. SB 117 was written by DFW Texas Senator Nathan Johnson, and the House version of the bill was sponsored by DFW-are Rep. Julie Johnson. The bill received bipartisan support in the house, with nine Republicans and 67 Democrats in the signing their support this spring, but it never made it to the House floor for discussion. The signatories to the bill would have been enough for the bill to pass in the House.

The short answer to why Texas hasn’t expanded coverage is politics. For Johnson and other advocates, the worry is whether or not it would pass the Senate, where Lt. Governor Dan Patrick controls which bills make it to the floor. Patrick has been an outspoken critic of expanding Medicaid in Texas, and committee chairs in the House and Senate have blocked the bill from moving forward. 

“Privately, I’ve had a lot of conversations with people who say, ‘This is necessary, but I’m not willing to sign my name until we think it can pass in the Senate,’” Johnson says. “There’s no doubt in my mind we could pass Medicaid expansion in the house tomorrow, if it were on the floor.”

Johnson and her Senatorial counterpart, DFW’s Nathan Johnson (no relation), came up with the “Live Well Texas” program with elements taken from other conservative states that have passed Medicaid expansion. The plan included incentives for people to work and take care of their health, which helped garner support for the Republicans who signed on to the bill. Coverage expansion has the support of hospital and business groups, including the DFW Hospital Council. 

Rep. Johnson was none too pleased with the behavior of the Lt. Governor, who she says is playing politics with a bill that has widespread support. “He behaves like a child having temper tantrums sometimes,” she says. “Unfortunately, that is done on the backs of Texans who need help from their state government on a variety of issues, and, unfortunately, he wants to prioritize his social agenda, that discriminates against Texans and restricts access for Texans in a variety of ways, over the public good that can be done.”

Rep. Kelly Hancock of North Richland Hills is not in favor of expansion because of potential costs. He is also chair of the business and finance committee in the Texas Senate. “Healthcare continues to be the fastest-growing part of our budget,” he told D CEO last year. “Texas already carries the third-largest number of people on the rolls in Medicaid. For those that promote it, I haven’t heard what they’re willing to cut. Are you going to cut education?… It’s easy to talk about it until you have to pay for it, especially going into this budget cycle.”

Looking ahead, Johnson is hopeful that House Speaker Dade Phelan will put some committee structures to work on a comprehensive healthcare bill in place and allow members of the house to continue to study the issue in preparation for the next legislative session in 2023.

But when an issue is supported by the 69 percent of Texans and most members of one chamber of the governments and yet still cannot get a hearing on the floor of either room, Johnson knows that actual change may have to come through the ballot box. 

“Those are political issues that need to be sorted out, but at the end of the day, the people of Texas need to demand that of their representatives,” Johnson says. “The people need to demand that the state improve healthcare in this state and focus on the number one issue to Texans.”

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