Program would expand coverage to 500,000 in Harris County

A potential expansion of Medicaid through the Affordable Care Act would provide coverage to more than 1.8 million individuals in Texas with 500,000 of these living in Harris County—if Gov. Rick Perry and the state legislature accept the program after the next session begins in January.

More than 1 million people—29.9 percent of the population—in Harris County are without health insurance, according to the U.S. Census Bureau. Compared to the state’s other urban counties, Harris County ranks second for the number of uninsured behind Dallas County, which had a 31 percent uninsured rate in 2010.

If the state accepts the Medicaid expansion, the number of uninsured would decrease to about 500,000 in Harris County, according to the Center for Public Policy Priorities. If the state rejects the expansion, about 800,000 in the county would be left without insurance.

In July, the Supreme Court ruled that states have the ability to reject the expansion without losing all Medicaid funding. Perry, along with five other governors, has already stated Texas will not participate in the expansion, citing high costs to implement the program and saying it would not result in better patient protection or more affordable care.

Conversely, some local facilities that receive Medicaid funding—including Reach Unlimited, where 75 percent of services are funded by the program—believe an expansion would be beneficial in helping pay for residential and individual services, which range from group homes to personalized training programs.

“It would open up funding for a lot of the folks in our community who are on the waiting list for services and help us to provide those services to more people,” said Kathi Schmidt, executive director of Reach Unlimited, which serves intellectually and developmentally disabled individuals. “There are folks in the community who have been on the waiting list for over 10 years.”

When the state legislature convenes in January, it will have its say on the matter.

“Even though the federal government pays most of the cost, the expansion still ends up putting a serious strain on the state budget over time,” said state Rep. Allen Fletcher, R-Tomball.

Expanded care

Medicaid is a joint state and federally funded program that provides payments for medical services for low-income families, pregnant women, the elderly, blind and disabled.

Although Medicaid serves more than 565,000 in Harris County, many more do not receive coverage because of low payment rates, a restricted provider network and restrictive eligibility requirements, said Scott Strang, chief operating officer for the Mental Health and Mental Retardation Authority of Harris County.

“The difficulty is that payment rates are so low that many providers, even ones enrolled in the Medicaid program, are reluctant or unwilling to take new clients because the reimbursement doesn’t cover the cost of providing services,” he said.

Another issue is that the state of Texas has some of the most restrictive requirements to determine who is eligible for Medicaid, Strang said.

“It’s important to recognize how big a problem the uninsured are in Texas and what an enormous opportunity the Affordable Care Act is for those people to get covered, either through the health exchanges or the Medicaid expansion,” he said.

The Affordable Care Act changes the qualifications from being both low income and pregnant, disabled or young, to being just low income, Strang said. If the law is enacted, anyone with an income less than 133 percent of the federal poverty level—less than $14,856 annually—will qualify. This change would allow many of the mentally ill patients MHMRA serves to qualify for Medicaid, he said.

“The biggest effect is that [the mentally ill] population would be covered based on their incomes and would have access not just to psychiatric services, but to physical and medical care services, which they can’t access now except through an emergency room,” he said.

Under the Affordable Care Act, 50 percent of hospitals’ disproportionate share payments—payments from seeing uninsured patients—will be cut.

“For that to make sense you have to increase the number of insured,” said Olivia Dear, executive director of the Harris County Health Care Alliance. “If one goes down the other has to go up. If these cuts happen to disproportionate share payments and we don’t expand Medicaid, our issues will double over a period of five years.”

If the state legislature votes against the Medicaid expansion, hospitals will still have to see uninsured patients, but they will be reimbursed through Medicaid as opposed to the disproportionate share payments, Dear said.

“If the state decides not to expand Medicaid, then that particular provision in the ACA will not work as it was supposed to,” she said. “The hospitals will have to see more uninsured with less compensation, which just makes our already flooded emergency rooms even worse.”

A possible alternative

Even if the Medicaid expansion does not go through in Texas, there is another way the state could expand coverage to more residents. The Balancing Incentive Program—also created by the Affordable Care Act—encourages states to balance out expenditures they have for institutional versus community-based services. States—including Texas—that already spend less than 50 and more than 25 percent of their money on community-based programs, which allow patients to receive care at home or in their local community, will receive a 2 percent increase in Medicaid funding from the federal government.

“It will bring in huge amounts of dollars for the state,” said Ken Collins, deputy director of the intellectual and developmental services division for MHMRA. “It’s significant.”

Schmidt expects that more funding from the Balancing Incentive Program could help the organization, especially after the 2011 legislative session, which cut 10 percent of the Medicaid budget.

“A lot of our folks have gone up [to Austin] to lobby, because they understand that the cuts to services will diminish their ability to live in the community and be as productive citizens as they can be,” Schmidt said.

Implementing the program

The Kaiser Family Foundation released a report in late November stating it would cost the federal government $952 billion and the states $76 billion to implement changes to the program. By 2022, it would cost Texas about $10 billion, according to the report.

Fletcher said one alternative involves Texas setting up its own health care insurance exchange.

“The intricacies still have to be worked out, but I am of the opinion that Texas should do its own exchange,” he said. “I think my constituents agree that our budget should not be dictated by this bill.”

If Texas does not accept the expansion, the additional money would go to other states in need. Strang said he believes there are two possibilities in regards to what would happen if Medicaid is expanded.

“It would reduce the burden of uncompensated care, so I think that’s positive, but the other side of it is, if all of a sudden we have a lot more people covered who are entitled to health care services but we haven’t produced any new clinics, doctors or nurses, there’s a possibility that the current underserviced health care system in Texas and Harris County could get overwhelmed by the new flood of demand,” Strang said. “It’s yet to be seen what relative balance those two possibilities would be.”

Additional reporting by Shawn Arrajj


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