“Texas leads the nation in a lot of good ways, but this is one of those things we don’t want to be leading the nation in,” said Annie Spilman, executive director of Texans for Affordable Healthcare.
Advocates are calling on the Texas Legislature to cut regulations that have contributed to rising health insurance costs in recent years. Expanding Medicaid eligibility and ensuring Texans know when they qualify for free or subsidized insurance will also help close gaps, experts say.
What you need to know
For three years in a row, Texas health insurance premiums have increased by over 5% annually, according to the Texas Association of Health Plans, a trade association representing insurers.
“The last several years, we've had the Legislature adding a lot more requirements, what we call mandates, to health insurance that go above what is required of the Affordable Care Act, above what sort of the federal requirements are,” said Blake Hutson, director of public affairs for the Texas Association of Health Plans. “It’s kind of like death by 1,000 cuts. ... Employers, who do provide the bulk of coverage in the state... are just increasingly facing higher and higher costs.”
The Affordable Care Act, enacted in 2010, is a federal law aimed at making health insurance accessible to more people through subsidies. States can create additional rules, but the ACA sets consumer protection standards for health coverage.
Texas has the third most health care mandates in the nation, according to Texans for Affordable Healthcare. Recent state mandates have limited the types of health coverage small businesses can offer, barred certain insurance providers from directing patients to mail-order pharmacies and more.
“Anything we’ve done that government has gotten in the way, that has inhibited competition, I think we seriously need to look at, is that oversight?” said Sen. Bob Hall, R-Edgewood, during a May 14 hearing of the Texas Senate Health and Human Services Committee. “I think we could do more about looking at what we could do to ... get out of the way and encourage the free market to help fix this problem.”
Zooming in
To promote affordability, Texans for Affordable Healthcare and the Texas Association of Health Plans are urging lawmakers to allow employers to offer a wider range of health insurance plans and halt new mandates until there is a transparent process to evaluate their costs to businesses and individuals.
“The segment of the market that is most squeezed by high health care costs is really small businesses,” Hutson said. “We actually have more health plans than any other state, but for small employers, they don't have a lot of options, and they tend to be really expensive. So really what the Legislature ought to be doing is focusing on how they can make coverage more affordable for small businesses.”
About 68% of Texas’ 3.2 million small businesses do not offer health coverage to their employees, according to Texicare, a small business insurer affiliated with Texas Mutual.
Roughly half of Texans have employer-sponsored health insurance. On average, Texas families pay over $7,500 in annual employer-sponsored insurance premiums, while employers pay $15,000 per employee, according to Texas 2036, a nonpartisan policy organization.
A lack of transparency is driving high health insurance costs, senators said during the May 14 hearing. Sen. Charles Perry, R-Lubbock, said giving people the true costs of medical services—“the needle, the doctor, the electricity and the bed”—could help lower insurance premiums.
“We could get really honest about what premiums and stuff can and should be, and that would expand the ability for people to pay and afford them, possibly,” Perry said. “It's really frustrating to talk about health insurance costs when the cost is made up of something that reflects no sense of reality. ... There's no incentive for insurance companies to pay less and the system of health care delivery we have today demands the lack of transparency for it to work.”
In a Dec. 10 report, the Senate Health and Human Services Committee said lawmakers should look into ways to increase “innovative, alternative” health coverage options and consider requiring insurance providers to publicly list their prices to help people shopping for coverage.
“We need to make sure that the options and the information out there for the individual to make those choices is more accessible for the average person in Texas, so they understand what they’re doing and they can actually see the true cost,” Sen. Morgan LaMantia, D-Palm Valley, said May 14.
More details
Texas is one of 10 states that have not expanded Medicaid, a state- and federally funded program that provides health coverage to certain low-income people. Texans can qualify for Medicaid based on a combination of factors, including income, household size, pregnancy or disability status and age. In states with expanded Medicaid, residents can qualify based on income alone, according to the federal government.
About 750,000 Texans are in the “coverage gap,” according to Texas 2036, meaning they make too much money to qualify for Medicaid and too little to receive subsidized coverage through the federal health insurance marketplace. This is because the Affordable Care Act directed states to expand Medicaid, but the U.S. Supreme Court ruled in 2012 that states could make the decision themselves.
Several Democratic lawmakers have filed legislation to expand Medicaid in Texas. Medicaid expansion would cover Texans with incomes up to 138% of the federal poverty line, which is about $38,300 for a family of four.
It would cost the state about $700 million per year to expand Medicaid, according to Eva DeLuna Castro, a budget analyst in the office of Rep. Donna Howard, D-Austin. Texas would also receive about $7 billion in federal funding, DeLuna Castro estimated.
Put in perspective
Comprehensive health insurance, including Medicaid, improves access to health care, according to Alec Mendoza, a senior health policy associate with Texans Care for Children, a policy nonprofit.
“Uninsured individuals typically wait longer to seek medical care, leading to worse health outcomes and higher costs for families and taxpayers,” Mendoza said. “Oftentimes, [uninsured] families wait until it is an emergency for their kid ... and they end up going to the hospital, and then our hospitals, because those kids are uninsured, see higher costs of uncompensated care.”
Texans without health insurance can visit federally qualified health centers, or FQHCs, which offer medical care regardless of insurance coverage or a patient’s ability to pay. There are 75 FQHCs located across 127 Texas counties, according to the Texas Association of Community Health Centers. These centers may offer medical, dental and behavioral health care; pharmacy services; and other support for patients.
Health centers provide care to medically underserved populations and can help patients avoid expensive emergency room visits, according to the TACHC.
However, FQHCs and other charity providers cannot always keep up with the demand for health care, Mendoza said.
“Care is unavailable in many counties, especially rural ones, and many services like cancer treatment, kids’ eyeglasses, support for chronic diseases, and specialty care are often only available to Texans with insurance,” Mendoza said. “So these valuable services that families are in need of all around the state don’t really happen in a lot of these places.”
