TEXAS and the Cruel Social Experiment

We may be in the middle of a huge social experiment and one that will likely reveal the effects of right wing social engineering. A number of states are threatening to opt out of Medicaid expansion. It will be a hard sell to the public as hospitals and health systems gear up to avoid losing billions of federal Medicaid dollars. Once election politics are over, it will be a hard sell to leave scores of uninsured with no option and state taxpayers, health providers, and insurance buyers holding the bill.

There are some states that might just “opt out” through. Texas is probably a likely candidate. There is an interesting irony playing out in Texas. Texas had the worst prior coverage in the US, dead last, so they have the most to gain. The comparative dollars per capita of new federal dollars going into an expanding the Texas Medicaid program would be very high because there are so many uncovered Texans (estimated 2 million new people would quality for expanded Medicaid). But the cost to implement the changes also rises (the feds pay everything for 3 years but starting in 2017 Texas would have to pay 10%). So while Texas has a potential huge windfall, the unfunded costs are also huge. A lot more than many states. Some states, like Maryland, have done such a good job in the past, their costs will actually go down. They will reap the benefits of all the federal expansion with a net savings. Those benefits should quickly trickle down to local agencies, governments and taxpayers. Local funds that previously made expanded coverage available will be freed up by the federal coverage dollars.

Further, while Texas cost-cutting has left programs at absolute minimums (Texas has the lowest per capita budget in the nation), no surpluses accrued to the state government because they also cut taxes so much to their corporate friends that their state budget remained underfunded. They have no income tax, only sales tax, corporate taxes and a host of fees to support revenue. They are legitimately broke. They passed last year’s budget with a 4 billion dollar underfunding of Medicaid (http://sunshinereview.org/index.php/Texas_state_budget). That bill has been kicked down the road. Texas also has $280 Billion in debt and unfunded liability, so paying the State part of expansion would definitely be a problem.

This creates an interesting, if cruel, social experiment. Some states will opt out, not many, but a few. Some states will find the money to expand. Some states will put up nothing, because they already addressed the issue and are already laying down a track record and database. I predict that hindsight will finally cast a true light on the detrimental effects of the poor care in American terms. No doubt more American lives will be lost due to lack of insurance. Previous studies suggest 45,000 deaths a year are attributed to lack of insurance (http://news.harvard.edu/gazette/story/2009/09/new-study-finds-45000-deaths-annually-linked-to-lack-of-health-coverage/). With that previous data and improvements likely to show in states that “opt in”, one has to wonder how the GOP will justify the such losses.  I am sure Fox will figure out something.

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