High tab for Medicaid inaction
Dallas taxpayers’ bill: $467M
Dallas County property owners paid more than $467 million in taxes last year to Parkland Health and Hospital System, the county’s only public hospital, to provide medical care to the poor and uninsured.
Their tax burden likely would have been lower if the state of Texas had elected to expand Medicaid, the federal-state health insurance program for low-income people. If more low-income patients at Parkland had been covered by Medicaid, then federal and state taxpayers would have picked up more of the costs.
Elsewhere in Texas and in most of the 20 other states that have chosen not to expand Medicaid, including Tennessee, residents pay local taxes to help support hospitals that care for uninsured people. On top of that, they pay a portion of the federal taxes that help subsidize Medicaid in the 29 states and District of Columbia that did expand the program to cover more people — places where residents can expect to see lower local taxes as more people become insured.
“Taxpayers (in nonexpansion states) are not going to get off the hook any time soon,” said Linda Quick, president of South Florida Hospital and Healthcare Association. Florida is one of the nonexpansion states where localities pay property taxes to support indigent care.
Under the Affordable Care Act, and a subsequent U.S. Supreme Court decision, states have the option of extending Medicaid eligibility to all non-elderly adults who make less than 138 percent of the poverty line (an annual income of less than $16,242 for an individual). For the first three years, the federal government will pay 100 percent of the costs associated with new enrollees. After that, the federal share gradually declines until it reaches 90 percent in 2020 and beyond.
Nationwide, the cost of caring for uninsured people in non-expansion states between now and 2024 is projected to reach $266 billion if no new states decide to expand Medicaid, according to a report in April from the Kaiser Family Foundation. If all states decided to expand, that cost would drop by a third.
Last year, Texas hospitals spent $5.5 billion for uncompensated care, according to the Texas Hospital Association. The federal government reimburses hospitals for part of that cost through a $1 billion-a-year Medicaid subsidy known as the Disproportionate Share Hospital Allotments, or DSH. As part of the Affordable Care Act, the DSH program will be sharply reduced starting in 2018.
Texas also receives $29 billion through a five-year Medicaid demonstration program, with about half of that money going to care for the uninsured. That program expires next year, and the state is negotiating with the federal government over its renewal.
Texas Gov. Greg Abbott, a Republican, and the heavily Republican Texas Legislature remain opposed to Medicaid expansion.
Abbott calls Medicaid, “an already broken and bloated ... program.” In March, members of the Republican Senate caucus wrote to President Barack Obama reiterating their opposition to expansion. They noted that the “Texas Medicaid program has grown from 11 percent of the state budget in 1987 to 29 percent in 2015,” a trajectory they labeled “clearly unsustainable.”