It Just Makes Sense! | The Perryman Group

It Just Makes Sense!

By: Dr. M. Ray Perryman
Published in syndication December 16, 2020

If there was a way for Texas to expand health insurance coverage to nearly a million of the state's most vulnerable people, enhancing their access to needed care, I think we can all agree that would be a very good thing. State budget constraints are a reality, but if the expansion could be accomplished without costing taxpayers anything, it would clearly be the right choice. What if Texas could increase coverage and actually come out ahead for taxpayers because of the substantial economic benefits? It would only make sense to do so. Right?

Texas is one of only 12 states that have not yet chosen to expand health insurance coverage to low-income adults using the financially attractive mechanism created by the Affordable Care Act (ACA) in 2010. In addition to enhancing the health and wellbeing of individuals directly affected, broadening coverage involves substantial business stimulus and tax revenues.

With more Texans having insurance, health-related spending would increase, generating additional business activity in communities across the state and throughout the economy. The level of uncompensated care could also be expected to fall, freeing up hospital and local taxing entity resources to be used for other critical priorities. This result is particularly beneficial to urban public hospitals and critical to the sustainability of rural care. In addition, increased coverage assists more people in obtaining the care that they need, improving morbidity and mortality outcomes and, in turn, increasing productivity, which provides additional economic activity and other benefits, some of which occur over an extended period

We recently studied this issue in detail (you can download the full report at We found that if Texas implements a program to access federal matching funds for health insurance expansion in 2021, the economic effects for the 2022-23 biennium would include gains of $45.3 billion in gross product, $29.4 billion in personal income, and almost 461,700 job-years of employment, including multiplier effects. These benefits increase over time.

This economic activity would also generate tax receipts. The Perryman Group estimates that the net total dynamic fiscal benefits during the 2022-23 biennium would include $2.5 billion to the State and nearly $2.0 billion to local government entities across Texas. For every $1 of non-federal funds invested, $1.95 is returned to the State in dynamic tax revenue.

Millions of Texans do not have health insurance. Most cannot afford private insurance and are often unable to obtain basic or preventive health care. It is a human tragedy with profound consequences. Texas could alleviate a substantial portion of this problem by expanding health insurance coverage using available federal funds while reaping notable economic and fiscal gains in the process. It just makes sense! Stay safe!!