Texas Likely to Reject Medicaid Expansion

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The Supreme Court of the United States, as part of their decision on the Affordable Care Act (ACA), ruled that the federal government cannot penalize states that choose to opt-out of expanding the Medicaid program. Texas is likely to be one state to reject that particular provision in the health care law, popularly known as “Obamacare.”

Texas joined twenty-five other states in arguing that cutting state funding as a way of coercing states to adopt a new federal program is not a power delegated to Congress by the Constitution. In this particular case, the majority ruled in favor of the states.

It is estimated that up to 1.5 million adults would be added on to the Medicaid program if Texas complies with the expansion provision. However, many conservative activists argue that the state should opt-out of expanding the program claiming that the risks far exceed the incentives.

The entire Supreme Court decision on ACA threw many political analysts and elected officials off guard. The main focus was on the constitutionality of the individual mandate, which was upheld by the high court, but as a tax and not under the Commerce Clause as many Democrats and the White House wanted.

Chief Justice John Roberts has been the focus of the debate regarding the Supreme Court’s decision. He shocked the country when he sided with the four liberal justices on the court in upholding the most controversial parts of the health care law.

Many political analysts have suggested that John Roberts was motivated by a desire to restore an image with the public that there is integrity on the high court. 5-4 decisions don’t resonate well, because those rulings end up falling on ideological lines. The Supreme Court is supposed to rule on a fair and objective interpretation of the law and not on personal politics.

The high court’s ruling on the Medicaid expansion provision set a precedent for future cases involving the federal government’s ability to force new programs on states, especially if the Constitution doesn’t grant Congress the power to do so. State legislators now have a bit more flexibility.

Under ACA, the federal government would cover the full costs of the Medicaid expansion until 2016. After that, states would be responsible for a marginal percentage of the costs. The White House and Democrats on Capitol Hill are expecting this to be the biggest incentive for states to adopt the provision.

According to the Congressional Budget Office, the federal government would end up covering roughly 93% of the costs of the Medicaid program. This would significantly reduce the burden on the states as the federal government currently covers 57% of the cost for Medicaid.

However, state lawmakers in Texas will end up looking at the overall amount the state will have to pay during the 2013 legislative session.

Texas would have to pay $800 million in 2014 to implement the law according to estimates released in 2011. The Texas Health and Human Services Commission estimate that new adults eligible for Medicaid would cost the state $9.5 billion over ten years.

The state has a history of being reluctant to expand programs like Medicaid going back to when Democrats were in control of both the State House and Senate. It is very possible legislation introduced during next year’s session to reject the Medicaid expansion provision in ACA will pass through the Texas legislature and will be signed by Governor Perry.