An exchange is a private-market solution where competition among insurance providers will stimulate innovation and cost reduction measures while avoiding some of the flaws of the Medicaid program. Utilizing the Federal funds designated for Medicaid expansion under the ACA to provide private insurance coverage for the newly Medicaid-eligible population through such an exchange would increase the economic benefits to the state by both decreasing the administrative costs to the state and increasing the potential gains.
According to an analysis by The Perryman Group, every $1 spent by the State of Texas to expand Medicaid coverage under the Affordable Care Act (ACA) returns $1.29 in dynamic State government revenue over the first 10 years of the expansion. Medicaid expenditures lead to substantial economic activity, federal funds inflow, reduction in costs for uncompensated care and insurance, and enhanced productivity from a healthier population. When these outcomes and the related multiplier effects are considered, the program actually far more than pays for itself and provides a notable economic stimulus.
The pandemic and resulting economic dislocations are creating significant fiscal challenges for the State and local governments. In particular, the budgetary process in the upcoming legislative session will be daunting.
Dr. Perryman explains this thought process and provides an argument for why it is incorrect.
Dr. Perryman explains the most recent development that may push Texas legislators toward expanding this healthcare program.
While this option has not been finalized as part of the stimulus package, Dr. Perryman explains how it could help Texas if it is passed.
The current draft of proposed Medicaid adjustments would drastically cut the amount of funding Texas is able to designate as their matching contribution for the federal government. If passed, this would have a dramatic negative effect on rural hospitals.
Texas remains the largest state that does not have a Medicaid expansion program, and Dr. Perryman says that's too bad.