They will hurt millions of people around the country, and hospitals and more as well.
Texas hospitals are facing a freeze in billions of dollars in federal Medicaid funding under a budget proposal introduced by House Republican leaders Sunday night.
Republicans are moving to limit access to a tax loophole that Texas and other states have used to tap extra Medicaid dollars for hospitals and medical providers. Texas hospitals would still be able to use so-called provider taxes to access higher federal reimbursements, but they couldn’t be expanded, even as healthcare expenses continue to rise.
“Ultimately it’s a cut to hospitals and other health care providers,” said Darbin Wofford, deputy director of health care at the non-profit Third Way. “As hospitals costs grow and states want to increase base payments or supplemental payments, now you’re tying the hands of the states.”
The cuts come as House Republicans move to cut federal spending in line with President Donald Trump’s plan to extend and expand tax cuts passed during his first term, which are set to expire later this year.
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Texas and other states that opted not to expand Medicaid to low-income workers under President Barack Obama’s Affordable Care Act have become particularly reliant on local provider taxes to keep solvent hospitals that are required to provide medical care regardless of a patient’s ability to pay. Hospitals and other medical providers in Texas have essentially levied the taxes on themselves in order to qualify for federal matching funds, which are often double what they send up.
Texas has the largest uninsured population in the country, according to non-profit KFF.
A spokesperson for the Texas Hospital Association said the group was still reviewing the budget language Monday morning. But earlier this year the group and other healthcare leaders said cuts to provider taxes would likely result in the shuttering of clinics and a reduction in hospital services.
As a non-expansion state, Texas would likely be less impacted by the work requirement than other states, Wofford said. Almost three quarters of Texas’s 4.1 million Medicaid recipients are under 19, with the remainder either disabled, pregnant, new mothers or elderly, all of which are exempted.
But the new protocols on proving eligibility were likely to push many Texans off the roles, Wofford added.
“Folks might still fall through the cracks due to the administrative burden and implementation issues with eligibility checks,” he said.
Of course they will. This is exactly what happened after the 2003 legislative session when Texas made it harder to enroll in the Children’s Health Insurance Program (CHIP) and also shortened the enrollment period from a year to six months. People fell off the rolls – which is a polite way of saying “children lost access to health care” – because of needless means testing and extra paperwork. Everyone knew it would happen, and it did. There’s no way that wouldn’t happen here. And many of those clinics that close and those hospitals that have to cut back will be in rural areas, where I’m sure they’ll be thinking they didn’t vote for that. They can do something about that in the next election.