Texas fails to see big pic­ture re­gard­ing health­care re­form

Perry fails to see how ex­pand­ing Med­i­caid ben­e­fits state, tax­pay­ers

Modern Healthcare - - NEWS - MER­RILL GOOZNER Ed­i­tor

The domi­noes are fall­ing. Last week, con­ser­va­tive Repub­li­can gov­er­nors in Ohio and Michi­gan joined the pa­rade of state lead­ers ad­mit­ting the U.S. has a ma­jor prob­lem in the way it pro­vides health­care for the unin­sured. The pub­lic, at least if we’re to judge by the re­sults of the Novem­ber elec­tion, en­dorsed the Pa­tient Pro­tec­tion and Af­ford­able Care Act as a rea­son­able ap­proach to solv­ing this fes­ter­ing so­cial blight, which has left the U.S.—more than half a cen­tury af­ter na­tional health plans were adopted in west­ern Europe—as the only ad­vanced in­dus­trial na­tion with­out uni­ver­sal cov­er­age for all of its ci­ti­zens.

The is­sue con­fronting gov­er­nors in the wake of the U.S. Supreme Court’s de­ci­sion last June is whether to ex­pand Med­i­caid to cover peo­ple earn­ing up to 138% of the fed­eral poverty level. Th­ese are peo­ple who, though work­ing, do not get ac­cess to af­ford­able in­surance on the job and are too poor to buy cov­er­age in the pri­vate mar­ket­place, even with fed­eral sub­si­dies that will be pro­vided through the in­surance ex­changes set up un­der the law.

The eco­nomic con­se­quences of fail­ing to pro­vide cov­er­age to th­ese near-poor Amer­i­cans are well-known but bear re­peat­ing. The unin­sured avoid rou­tine care, which means they do not get ac­cess to the cost-ef­fec­tive pre­ven­tive care that would keep them away from hospi­tal emer­gency rooms. When they seek out care, they are of­ten far sicker than they would have been un­der the care of a pri­mary-care physi­cian. Or, they make the emer­gency room their first stop when they need rou­tine care (like this win­ter for a se­ri­ous bout of the flu).

Those types of vis­its can trans­late into very high per­sonal bills, leav­ing the sick, work­ing poor with a moun­tain of un­paid debts. Mas­sachusetts Sen. Elizabeth War­ren burst onto the na­tional scene as a so­cial pol­icy thinker by doc­u­ment­ing how un­paid med­i­cal bills were the No. 1 cause of per­sonal bank­ruptcy in the U.S.

So what hap­pens next? Hos­pi­tals must raise their prices on all of their paying cus­tomers to pay for this un­com­pen­sated care, an oxy­moron if ever there was one. Are the emer­gency room physi­cians un­paid? Do the nurses, tech­ni­cians and or­der­lies put out a tip jar? There is no such thing as un­com­pen­sated care. There are only un­paid bills that get picked up by some­body else.

The ACA was de­signed to have the vast ma­jor­ity of th­ese un­paid bills picked up by Un­cle Sam, 100% in the short run and 90% in the long run. And in that long run, it makes much more sense to fi­nance cov­er­age that pro­vides rou­tine care through the uni­ver­sal tax sys­tem than to fi­nance more ex­pen­sive emer­gency room cov­er­age later through a sur­rep­ti­tious tax on ev­ery one else’s in­surance pre­mi­ums.

Michi­gan Gov. Rick Sny­der fi­nally got it. When he re­versed course and an­nounced his de­ci­sion to ex­pand Med­i­caid, he pointed out it would bring $20 bil­lion into the state dur­ing the next decade. The state’s gen­eral fund would save about $1.2 bil­lion by 2020 by re­mov­ing nearly a half mil­lion res­i­dents from the ranks of the unin­sured. Gov. John Ka­sich, a rock-ribbed con­ser­va­tive in Ohio, made a sim­i­lar cal­cu­la­tion.

But if those are the stakes in Michi­gan (13% unin­sured) and Ohio (14% unin­sured), what would be the ben­e­fits to Texas, the big en­chi­lada when it comes to ben­e­fits de­rived from sign­ing onto Oba­macare? The Lone Star State has nearly one-quar­ter of its pop­u­la­tion unin­sured, or 5.6 mil­lion peo­ple. The Texas Hospi­tal As­so­ci­a­tion es­ti­mates that the 595 com­mu­nity hos­pi­tals in the state pro­vide a stag­ger­ing $5.4 bil­lion in un­com­pen­sated care.

So far, Repub­li­can Gov. Rick Perry’s re­sponse to Oba­macare is not just to say no, but to say “hell no.” The blan­dish­ments of the lo­cal med­i­cal es­tab­lish­ment so far have failed to sway the former pres­i­den­tial can­di­date. In­stead, he’s stick­ing to his call for turn­ing Med­i­caid into a block grant.

What­ever the mer­its of that ap­proach, Perry stands no chance of get­ting a block grant waiver out of the Obama ad­min­is­tra­tion. It right­fully fears Perry would use the waiver to un­der­mine the cov­er­age stan­dards in the law.

Perry can stand firm in the face of that re­fusal. Or he can put in a few calls to Sny­der and Ka­sich and learn first­hand why ex­pand­ing Med­i­caid is the right thing to do—not only for the unin­sured in his state, but for his tax­pay­ers, for busi­nesses that al­ready pro­vide their em­ploy­ees with health in­surance and for the state’s health­care providers.

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