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FOR IMMEDIATE RELEASE March 12, 2013
New Medicaid Coverage Will Free Up $1.2 Billion in Available General Revenue in 2014-2015 Biennium
Newest numbers from Billy Hamilton Consulting provide conservative preliminary look at GR impacts of extending Medicaid to low-income adults
Release: New Report Shows Local Tax Impacts from Offering Medicaid Coverage to Low-Income Adults (2013)
FOR IMMEDIATE RELEASE JANUARY 28, 2013
Report by Billy Hamilton analyzes state and local impacts of extending Medicaid under the Affordable Care Act (ACA)
CONTACT: Bee Moorhead, 512-636-3135, firstname.lastname@example.org
AUSTIN, TX--A report issued today provides the most comprehensive analysis to date of the costs and benefits to local taxing authorities (including cities, counties and hospital districts) and state government if the Legislature chooses to extend Medicaid benefits to low-income adults under the Affordable Care Act (ACA). Click here to read the full report. (Right-click the link and choose "Save Link As" to download the report).
Billy Hamilton Consulting prepared the report, titled Smart, Affordable and Fair: Why Texas Should Extend Medicaid Coverage to Low-Income Adults, for Texas Impact and Methodist Healthcare Ministries of South Texas, Inc. An Executive Summary of the report is also available.
Texas Impact Executive Director Bee Moorhead said, "Our analysis shows conclusively that extending Medicaid to low-income adults is the smart, affordable and fair choice for the state--and that passing up this opportunity will place local taxpayers, low-income Texans, and the entire state health care system at a significant disadvantage going forward."
The report demonstrates that local property taxpayers and hospital charity programs already spend about six times as much on low-income health care as it would cost the state to extend Medicaid coverage to adults who have incomes below 138 percent of the federal poverty level (FPL)--$15,415 for a single adult and $31,809 for a family of four. Under the Affordable Care Act, Texas could cover adults aged 18 to 64 whose incomes are below 138 percent FPL, with the federal government paying an average of 90 percent of the cost of coverage for low-income adults over the next ten years.
"For years, Texas has had the highest uninsured rate in the country, with 6 million Texans lacking health insurance. Now we have a chance to change that, and there is no excuse for any other course of action than extending Medicaid to low-income adults," said Kevin C. Moriarty, President and CEO, Methodist Healthcare Ministries of South Texas, Inc.
The report provides funding estimates and Medicaid enrollment scenarios that rely on population and caseload projections by former Texas State Demographer Steve Murdock, and cost estimates from the Texas Health and Human Services Commission. The report provides three scenarios-"limited" (based on minimal enrollment), "moderate," and "enhanced" (based on extremely high enrollment levels). All major findings are based on the "moderate" scenario.
The report compares these funding estimates with spending data from local jurisdictions and charity cost data from mandated, uniform hospital reports. The report explains the interactions between existing low-income health spending at the local level, and state and local fiscal impacts of extending Medicaid under the ACA. Impacts include anticipated increased enrollment by children who are currently eligible for Medicaid or CHIP but not enrolled, and who likely would enroll along with their newly eligible parents. The report also uses econometric modeling to estimate employment and economic impacts of adding low-income adults to Medicaid.
The report includes regional breakouts of caseload, spending and fiscal impacts for each of the state's 20 Regional Health Partnerships (RHPs). The RHPs are multi-county regions coordinating health care spending and delivery under Texas' new federal Medicaid Transformation waiver.
- The state match required for the Medicaid expansion could be met many times over with funds the state, local jurisdictions and hospitals already spend on health care for low-income adults.
- The $1.8 billion in new state revenue generated by the expansion could offset about half of the state match required from 2014 through 2017.
- The economic activity from the infusion of federal funds would boost Texas economic output by $67.9 billion, and add $2.5 billion to local revenues during fiscal 2014-17.
- The economic activity would generate an estimated 231,000 jobs by 2016.
- Every region and every county in the state would benefit from the additional federal funds.
- The new coverage would reduce Texas' uninsured rate by about 25 percent, insuring up to 2 million people.
- The new coverage would increase efficiency in state and local health programs by moving currently uninsured adults to managed care.
- The new coverage would save the lives of an estimated 5,700 adults and 2,700 children every year.
- Other states are also finding that current spending and new revenue would cover their state match requirements and provide savings.
- Failing to extend Medicaid would not improve the state's likelihood of getting a block grant and would likely decrease the amount of funding the state would receive if a block grant were ever to occur.
- Due to provisions in the ACA, failing to extend Medicaid would leave low-income Texas adults with no access to subsidized insurance and no alternative but to use expensive emergency room treatment for routine care.
- (Key Findings also available in PDF format)
Overall State Fiscal Impact
For the 2014-15 biennium, Texas would receive $7.7 billion in federal funds for adults and $1.4 billion for children for a state match of $297 million for adults and $889 million for children--a total of $9.1 billion in federal funds for $1.2 billion in state match. For the 2016-17 biennium, Texas would receive $15.2 billion in federal funds for adults and $3.1 billion for children for a state match of $989 million for adults and $1.6 billion for children--a total of $18.3 billion in federal funds for $2.6 billion in state match.