Kaiser, Policy

Texas wants Trump administration to renew $6.2B Medicaid deal to finance care for the poor

Half the money is used to help hospitals finance care for the uninsured, and the rest goes to hospitals and other providers to test regional programs to improve care and access.

Texas rejected billions in federal aid to expand Medicaid under the Affordable Care Act, calling the program “broken.” But now it’s asking the Trump administration to renew a deal that’s brought the state an additional $6.2 billion a year under Medicaid to help care for the poor.

Half the money is used to help hospitals finance care for the uninsured, and the rest goes to hospitals and other providers to test regional programs to improve care and access, such as opening school-based health clinics to steer people away from expensive emergency room visits.

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State officials are hoping to win a 21-month extension of an agreement that began in 2011 and will expire in December.

The Trump administration signed off on a similar pact with Florida in April, increasing extra Medicaid funds to that state from $600 million a year to $1.5 billion annually. In December, the Obama administration extended a pact with Tennessee to 2021. It is worth at least $500 million a year to the state.

Several states receive such funds but Texas’ allocation is the highest. To put Texas’ request in perspective, $6.2 billion represents more than a third of what the federal government now contributes to the state’s Medicaid program annually. Texas kicks in the balance to pay for its $29 billion Medicaid program, which covers nearly 4.8 million people.

Hospitals are counting on the cash to absorb the costs of uncompensated care, which they say has escalated even as the state’s uninsured rate fell from 20 percent in 2013 to 16 percent in 2015, according to the Kaiser Family Foundation’s estimates. (Kaiser Health News is an editorially independent program of the foundation.)

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Without the money, programs and services to the poor will have to be cut, including many new health clinics opened to expand access, hospitals say.

“Absent the dollars from the waiver, we would have to start to close the clinics and cut back on the manpower,” said George Masi, CEO of Harris Health System, a large public health system based in Houston.

The uninsured rate has fallen in Houston, but surrounding Harris County still has more than 1 million people without health insurance.

Photo: gguy44, Getty Images

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