Texas Should Be The Next Red State To Expand Medicaid
Note: This post had been updated with newly available data and links to new resources.
Now that voters in Oklahoma and Missouri have chosen to accept federal Medicaid expansion funding to cover grocery store workers and other low-wage uninsured adults, Texas is one of only 12 states that haven’t implemented Medicaid expansion yet.
Texas should be next. Here’s what you need to know:
Under Medicaid expansion — the only state policy option for significantly reducing the state’s uninsured rate — an estimated 1.4 million uninsured low-wage Texans would become eligible for Medicaid health insurance. That estimate, released by Kaiser Family Foundation (KFF) in early 2021, is based on data from 2019 and therefore is expected to rise as more data becomes available regarding the loss of job-based health insurance during the COVID-19 pandemic. Additional details from the KFF estimate shows that nearly 800,000 Texans were in the Coverage Gap, meaning their income was below the poverty level and therefore, under current state law, they likely had no affordable insurance option. The rest of the 1.4 million Texans have incomes between the poverty level and 138% of the line. In addition to covering adults, Medicaid expansion has been shown to indirectly decrease the children’s uninsured rate by connecting more families with health coverage.
Most people who would benefit from Medicaid expansion are working — or would be able to work thanks to Medicaid expansion. Over three-quarters of uninsured Texans who would be covered by Medicaid expansion are in a family with at least one worker. Many are employed in construction, food preparation, sales, and other fields. Medicaid expansion also helps more people start working or go back to school.
Texas is one of the only remaining states where uninsured workers with jobs below the poverty line — like child care educators, grocery store cashiers, and aides to seniors and people with disabilities — typically can’t get Medicaid insurance. Many adults with low-wage jobs do NOT receive job-based insurance for themselves or their kids; do NOT earn enough to purchase private insurance; and do NOT qualify for Affordable Care Act (ACA) insurance subsidies designed for individuals above the poverty line. In Texas, they typically do NOT qualify for Medicaid insurance, which our state largely limits to children, pregnant women, seniors, and people with severe disabilities. For example, if a single parent with two kids has a yearly income between $3,900* and $22,000, then he or she earns too much to qualify for Texas Medicaid and not enough to qualify for ACA subsidies. Under the ACA, Medicaid expansion is intended to cover them.
Texas has the highest uninsured rate in the nation — and it’s getting even worse during the pandemic. Before the pandemic, Texas already had the nation’s worst uninsured rate for children, adults, and women of childbearing age. By July of 2020, according to one estimate, the Texas uninsured rate had climbed to 29 percent for nonelderly adults during the pandemic, the worst rate in the nation, with an additional 659,000 uninsured Texans.
State policies have led to high uninsured rates among Texans of ALL backgrounds — and Medicaid expansion would help Texans from all backgrounds. From Longview to McAllen to Amarillo and beyond, all of the state’s top 25 metro areas have a worse uninsured rate than the nation as a whole. The state has higher uninsured rates for every racial/ethnic group compared to national averages. In fact, (non-Hispanic) White children in Texas are almost twice as likely to be uninsured compared to (non-Hispanic) White children nationwide (8.3 percent and 4.3 percent, respectively).
Reducing the uninsured rate is critical for detecting and stopping cancer, supporting healthy moms and babies, managing mental health challenges, treating substance use disorders, and addressing other health needs. Research shows that when people have insurance, they are healthier and less likely to die prematurely. While there is a valuable patchwork of services for the uninsured, including community health centers, using these services is often too little, too late. And many charity providers simply can’t keep up with demand. Care is also unavailable in many counties, especially rural ones. Many services — such as cancer treatment, kids’ eyeglasses, support for chronic diseases, and specialty care — are often available only to Texans with insurance. Uninsured individuals typically wait longer to seek medical care, leading to worse health outcomes and higher costs for families and taxpayers, and they are less likely to see a health care professional. Nearly 3,000 Texans died — just looking at Texans age 55-64 from 2014 to 2017 — because Texas didn’t implement Medicaid expansion.
Expanding Medicaid would help Texans through the COVID-19 pandemic and soaring unemployment. For the many Texans who have lost jobs or work hours and lost their insurance during the pandemic, Medicaid expansion would provide greater access to care — whether for COVID-19, cancer, or other concerns — and greater financial stability, preventing crippling medical debt.
Expanding Medicaid is essential for fighting racial injustice. Black Texans face higher risks of infant mortality, low birth weight, maternal mortality, and other tragic health outcomes compared to other Texans. The coronavirus pandemic has also placed Texans of color at greater risk than other Texans. One of the reasons for these health disparities is the lack of access to health insurance. In Texas, there are big gaps between the uninsured rates for White adults (15%), Black adults (23%), and Hispanic adults (38%) under age 64. Non-elderly Hispanic Texans account for 57% of the uninsured adults who could gain coverage if the state expanded Medicaid, although they account for just 39%** of working-age adults in the state. Medicaid expansion would take a big step towards addressing the state’s health disparities, while also helping Texans of all racial/ethnic backgrounds (as explained above).
Pumping billions of Medicaid expansion dollars into Texas would help reboot our struggling state economy, help rural hospitals stay open, create jobs, and take pressure off of property taxes. By implementing Medicaid expansion, Texas would draw down $10 billion or more per year in federal health funding. The funding would help the economy recover from the current recession. It would create — and save — health care jobs. (A 2013 study estimated it would generate 231,000 new Texas jobs by 2016.) It could prevent more closures of rural hospitals. It would reduce the need for local governments to use property tax revenue to provide health care services to uninsured residents. It would also cut down the amount of uncompensated care that hospitals provide. Medicaid expansion would also reduce pressure on the monthly insurance premiums paid by Texans who already have health coverage. These are some of the reasons that so many Texas leaders from the business community, local government, and other sectors have endorsed Medicaid expansion.
Medicaid expansion would be neutral — or beneficial — for the state budget. The federal government is required by statute to cover 90 percent of the cost of Medicaid expansion. Recent Medicaid expansion discussions in Texas have theorized that the funding for the remaining “non-federal” 10 percent share of the cost could be financed in part by redirecting a portion of local government funds and health care provider funds that Texas uses to cover the state’s share in the current 1115 Medicaid Waiver. That funding could be combined with state budget savings made possible by Medicaid expansion and as well as new revenue sources to ensure costs are fairly distributed statewide and across all the sectors that would be receiving more Medicaid revenue. In fact, a new study published by the Episcopal Health Foundation found that Texas would save money in the state budget by implementing Medicaid expansion. Other states reduced state spending in particular areas — such as mental health and corrections — by using federal Medicaid expansion dollars.
Medicaid expansion has been a big success in other states. This recent Kaiser Family Foundation report summarized over 400 studies of Medicaid expansion, concluding that expansion has been a success — in many ways — in the states that have implemented it. For example, residents of those states have seen better overall health outcomes, more financial security, and less medical debt.
Polling before the pandemic shows a strong majority of Texans support Medicaid expansion. Last year, a poll commissioned by the Episcopal Health Foundation found that 64 percent of Texans support Medicaid expansion. A 2016 poll by the Texas Medical Center Health Policy Institute found that 63 percent of Texans backed expansion. Other polls show similar results.
So far, the Legislature and Governor have failed on Medicaid expansion — but the tide may be turning. During recent legislative sessions, numerous lawmakers have filed bills to expand Medicaid, but the Governor, Speaker, Lt. Governor and other legislative leaders have largely ignored the bills and the issue. In 2019, a legislative committee held the first Medicaid expansion hearing in several years. Testimony overwhelmingly supported the bill, but the committee did not approve the legislation. The House held a vote on a budget amendment to expand Medicaid, but lawmakers voted it down along party lines. The Senate took no action on health coverage. After the session, legislative leaders signaled a greater interest in addressing health coverage — or at least acknowledging the issue — by directing legislative committees to study ways to reduce the Texas uninsured rate. Since the pandemic erupted earlier this year, calls for Medicaid expansion in Texas have only grown louder.
There are multiple ways state leaders can design and pass Medicaid expansion. When it upheld the ACA, the U.S. Supreme Court left it up to individual states to decide if and when they will implement Medicaid expansion. Here in Texas, Governor Abbott can implement Medicaid expansion on his own; the Legislature can pass it; or the Legislature can pass a constitutional amendment allowing Texas voters to decide on Medicaid expansion. Texas can implement a traditional Medicaid expansion program or — like Arkansas, Indiana, and other states — design its own health coverage solution with Medicaid expansion funding through a Medicaid 1115 Waiver.
The federal COVID-19 relief package passed in March 2021 makes Medicaid expansion an even better deal for states like Texas that have not implemented the policy yet. The relief package offers an additional $3-6 billion to our state over two years if our Legislature moves forward with Medicaid expansion. In light of this new opportunity for Texas, we strongly urge previously skeptical state leaders to give Medicaid expansion a second look.
* For a Texas family of three with one parent, the parent Medicaid monthly income limit is $230 per month plus an additional "income disregard" of $90.50 per month, for a total of $320.50 per month or $3,846 per year.
** Thirty-nine percent figure provided by Every Texan, using the Center on Budget and Policy Priorities’ analysis of data from the U.S. Census Bureau's 2018 American Community Survey.