Medicaid is Back in the News, What Does it all Mean???

There seems to be another burst of information about Medicaid in the news cycle, and unless you have been dealing with health care finance for numerous years, it seems pretty arcane and complicated. Kudos to Markian Hawryluk who did an outstanding job of taking this difficult subject and putting it into a reasonably condensed story: $4 billion health care for poor Texans at risk. The sad thing to me is that we don’t really hear much of a policy debate or even a funding debate or discussion going on in Austin; it is simply being rejected due to political bluster.

I will try to explain the steps that have led to the recent outburst of media attention, and like most things in health care, it is never simple. Let’s start with the fact that Texas has barely held together “systems” of caring for low-income Texans by reimbursing health care providers (mostly hospitals who care for people in the ERs) for uncompensated care through a convoluted mixture of local and state dollars matched by federal dollars. We have relied on these matching federal dollars to keep the safety-net health care providers operating since the 1980’s, as the state and local governments in Texas have not had the ability and/or will to meet the needs in the communities.

Interestingly enough, the last time the federal dollars were restricted (in the late 1990’s); we faced a crisis in emergency care that impacted everybody, not just the indigent. It took several years to build back the capacity to meet the increasing demands of a rapidly growing state population. One could argue that we barely have enough capacity to care for what we have on hand right now, let alone future growth. Please understand that these dollars are payments to providers for services to low-income Texans, but if the funds don’t continue in one form or another, all people living in Texas will be facing limited access to care.

Back to our Medicaid funding challenge: in 2010, Texas negotiated with the federal government to move one mechanism of supplemental funding (formerly known as UPL) to a program called an 1115 Waiver. When it was negotiated, the intent of both state and federal governments was for it to fund programs that would be sustainable after the five year timeline because the uninsured would be covered by components of the Affordable Care Act (ACA). This waiver will expire in the end of 2016, and renegotiating this waiver is what has caused all the recent uproar.

It should not be news to you that Texas has rejected any sort of engagement with the federal government on the pieces of the ACA, including covering low income people with a Medicaid expansion or some alternative coverage mechanism. So when the funding from the 1115 waiver ends in 2016 (due to the Supreme Court ruling that this was a state option and not a mandate), the sustainability of the safety-net will again be seriously challenged. Prior to last week, there seemed to be a level of confidence amongst leadership of the Texas Medicaid program in Austin that the federal government would renew or extend the existing waiver with enough funding to help the safety-net providers. Last week, the federal team that negotiates these waivers made it clear (first to Florida, and then Texas), that they would not provide funding for uncompensated care that is provided to patients who should be covered by Medicaid or an alternative coverage mechanism.

So, how did Texas leadership respond? Governor Abbott immediately supported Florida’s lawsuit against the federal government and released a statement that Texas would not expand Medicaid coverage in any way. Lt. Governor Patrick already explained his position by demanding flexibility. From what we can tell, there are no discussions about what really happens to the safety net health care providers or access to health care for Texans across this state, only political statements.

What can we, those of us not in elected leadership positions, do about this? First, we need to push our state leadership to find reasonable and rational pathways forward. While there isn’t any specific legislation to write in to support, you can still demand that they work toward a reasonable solution and stop the political pandering. We cannot accept political bluster; it is only the health care in Texas that is really at stake.

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Medicaid Talks, Tax Cut Challenges, and Looming Lawsuits

Last week started with a very difficult press conference for health advocates. On Monday, March 2, Lt. Governor Dan Patrick and Sen. Charles Schwertner brought together the GOP caucus in the Senate to declare necessary reforms to the existing Medicaid system that must happen before progress on Medicaid expansion could ever be considered. While this may have sounded positive, the stipulations they set out included several “poison pills” that they knew the federal government would not likely approve. The only positive thing that several of us in the health care advocacy community noticed is that neither the Governor nor the Speaker was in attendance. Sometimes we have to look for small victories.

Budget discussions progressed last week with no decisions being made, but the Senate held two days of hearings on several tax cut proposals. These hearings culminated with the Senate leadership laying out a suggestion that tax cuts and debt reduction should not count against the spending cap. The House leadership did not seem to agree with the Senate on this issue immediately either, but it did lay out an interesting opportunity for legislators to consider ways that they could meet several obligations at once with the extra revenue they have this year without having to vote to break the spending cap.

Finally, much attention was on the US Supreme Court which heard the beginning arguments of the King vs. Burwell case. In summary, this critically important case could either reaffirm or discontinue the health insurance subsidies that have helped over a million Texans purchase health insurance this year under the ACA. Most importantly, it shined a light on the opportunities the Texas Legislature has to control its own destiny or be at the mercy of the court. A special thank you to State Representative Chris Turner  who has developed HBs 817 and 818 which would facilitate a state-based exchange and thereby protect the coverage subsidies that so many Texans need to maintain their coverage. We are not optimistic that either of these bills will make it to the Governor’s desk for signature, but it is good to know that there are members of the Legislature that see the challenge and are responding to it.

Now that the introductory committee hearings have all been completed and they are all comfortably staffed and operational, we are expecting substantive bills and decisions to come into focus. Considering we are eight weeks into a twenty week session, things will start to happen quickly.

Focusing on the Fundamental Challenge: Texans Lacking Health Insurance

For months in Austin and across Texas, several different advocacy groups and a few legislators have been calling for Medicaid Expansion utilizing the Affordable Care Act (ACA); additional voices support the effort but call for an alternative that achieves coverage expansion in a Texas specific manner. On the other side, conservative think tanks have been posting up stories and articles opposing any form of Medicaid or coverage expansion that embraces the ACA (short of some sort of undetermined block grant). The arguments move from policy to financial to philosophical to political and everything in between.

In the coming weeks and months, it is expected that the debate will include the challenges of renewing the 1115 waiver in Texas that has increased mental health services as well as improving numerous other points of needed access to health services. Unfortunately, it would seem that at the moment, the leaders of Texas would prefer discussing anything other than the fundamental components of this challenge.

What has been lost in this debate is the actual problem that has been a challenge to the healthcare systems in Texas (as well as the country) for decades: people who lack health coverage still get sick and hurt, and as a society we support delivering care to those in need regardless of the ability to pay. In fact, President Ronald Reagan signed the law that mandates care back in 1986 (via emergency facilities in hospitals), and the federal government has been holding hospitals accountable to that mandate ever since.

A direct payment for the cost of delivering this care was not included in that act or subsequent acts of Congress, so hospitals (and communities) have created cost-shifting mechanisms to cover this uncompensated care, including pursuing special funds from the federal government to help offset the costs. With the passage of the ACA in 2010, Congress and President Obama called for a change in this uncompensated system by significantly reducing the number of uninsured, but the implementation of that law has been a challenge from the start.

We are not going to begin defending or critiquing the ACA, but with this change in law, the challenge of paying for the care of people who lack health coverage is shifting. The tools and mechanisms that have held health care delivery systems together, including those in Houston, can’t address the current situation. As the Harris County Healthcare Alliance, we are working to encourage an open and collaborative conversation about the best way to move forward, but we must first gain consensus from the leaders that indeed this challenge is the one we are working to solve: finding the most effective and efficient way to provide healthcare to Texans who are sick or hurt and have no health insurance coverage. If we can encourage leaders to agree on the problem, we are at least 80% of the way to finding a solution that is palatable to all Texans.

The Alliance will be working to build a consensus to make the case that this needs to be the focus of the discussions as the Legislature continues its work. We will keep you posted on how you can help. Stay tuned!

Texas Legislature in the Starting Blocks

Our new governor was sworn in Tuesday and the 84th regular session of the Texas Legislature officially started last week. With all the new faces in leadership in Texas, nobody is expecting much action the first several weeks; but like any good race, it will accelerate quickly toward the finish line 140 days later.

We are cautiously optimistic that several big health and human services budget and policy items could make progress this year with the new leadership, but fully realistic in our expectations that “Medicaid Expansion” as outlined in the ACA is a longshot. The most important activity of every Texas Legislative regular session is to pass a budget that will cover the next two fiscal years. Even with the falling price of a barrel of oil, most early expert prognosticators indicate that they should have adequate resources to properly fund existing services with perhaps some extra revenue left over (NOT a common occurrence in Texas). The big debate will be what to do with the expected “surplus” revenue.  With several newly elected leaders already promising tax cuts and other voices calling for restoration of cuts that went into effect in 2011, it is likely a safe bet that there will a mix of the two to get a budget adopted in both houses and signed by the new governor.

Speaking of the new governor, Governor Abbott will be the center of attention on where (or if, in reality) he directs the Health and Human Services Commission (HHSC) to focus energies as it relates to negotiating with the federal government on strategies to cover the uninsured. The other big item of attention as it pertains to health and human services will be the Texas Sunset Commission report and resulting legislation relating to reforming the entire HHSC enterprise. Look for regular updates on this legislation as it gets rolling through the process.

And finally, speaking of legislation, there are lots of bills that have already been filed and many, many more to come. We will be tracking all sorts of interesting issues and activating our network when the situation calls for it. Buckle in, it is going to be a bumpy ride!