Texas gov. Perry backs away from Medicaid dropout threat

Dec 6 2010

Houston Chronicle: "Medicaid and the Children's Health Insurance Program are breaking the state's budget, but opting out of the federal programs would have a devastating effect on health care delivery in Texas, according to a state report issued Friday. The report said most of the methods for fixing Medicaid spending in Texas will require acts of Congress, not the Legislature, to give the state greater flexibility in how the programs are run and a greater share of the national Medicaid financing."  

"The state estimates the new health care law will cost Texas government an additional $27 billion in the 10 years after 2014. State Rep. John Zerwas, R-Richmond, who passed the 2009 legislation calling for the study, said the report should end discussion of opting out of Medicaid unless changes are made by Congress" (Ratcliffe, 12/3). 

Dallas Morning News: "Opting out of Medicaid would deprive Texas of at least $15 billion a year in federal funds and strip up to 2.6 million people of coverage," the report said (Garrett, 12/4).

The Associated Press/KTSA: "High-ranking Republican state officials, including Gov. Rick Perry, [had] suggested that Texas could become the first state in the nation to opt out of the program. 'What's getting lost is the need to reinvent Medicaid, not getting out of Medicaid,' Texas Health and Human Services Commissioner Tom Suehs said Friday in an interview with The Associated Press."  

"Perry has expressed a preference for a block grant in which Washington would send Texas money without strings attached, letting state officials spend it independent of federal mandates. ... He backed away from that opt-out talk on Friday" (Castro, 12/4).

Dallas Morning News, in a separate story: "After big GOP gains in last month's election, Perry said on CNN that Texas could drop out of Medicaid and create its own insurance program for some of the poor people now covered. ... Tim Graves, the top lobbyist for nursing homes in Austin, said opting out of Medicaid would be 'precipitous' and 'have a tremendous negative ripple effect throughout Texas' health care system and economy.' As the study noted, Medicaid pays all or part of the cost for two-thirds of the Texans in nursing homes. Graves said 118 facilities have closed over the past decade, and more would do so if the state pulls out of Medicaid. ... The study said next year's price tag for the program - $30 billion in state and federal funds - represents a 170 percent spike over its $11 billion cost in 2000" (Garrett, 12/4).

Texas Tribune: "Suehs hopes the feds will be inspired to act because they're hearing the same message from states across the country: 'You can't sustain the growth rate of the Medicaid program with the current restrictions and parameters. ... Whether you're in Medicaid or you opt out of Medicaid, your debate is fundamentally the same. What does our safety net health care system look like, how are we going to deliver it, and how are we going to pay for it?' Suehs said. ... Suehs acknowledged that some earlier estimates about the cost of federal health care reform might have been a little high — mostly because they included estimates that hospital systems would lose large sums of federal uncompensated care funding. 'We recognize we may have overstated,' Suehs said" (Ramshaw, 12/3).