FederalHealthcareIssuesStatewide NewsThe Status of Texas Healthcare: Many Uninsured Texans Choose Not to Purchase Insurance

The report pegged Texas’ uninsured rate at 17.7 percent, amounting to roughly five million people. That was up about 0.5 percent from the year before.

When compared with the national average of 8.9 percent, the uninsured rate in Texas is twice as high.

While federal and state governments routinely focus on coverage numbers, coverage is only one part of the overall evaluation of healthcare. Access to care, quality of care, and cost are critical evaluations. And many studies and surveys have shown that Americans are more concerned with cost than whether or not they have an insurance card.

With that in mind, the focus on coverage remains a fixture for many lawmakers. And an analysis of the uninsured in Texas reveals some interesting takeaways.

Numbers from the left-leaning Kaiser Family Foundation in 2017 showed roughly 12 percent of the uninsured in the Lone Star state are eligible for Medicaid but have chosen not to enroll. A significantly larger percentage — 35 percent — are eligible for Obamacare subsidies on the exchanges, but have not enrolled.

And a whopping 38 percent of the uninsured in Texas are entirely ineligible for taxpayer-provided assistance as either their incomes are too high and they choose to go without coverage or they are non-citizens.

Additionally, Kaiser’s 2017 data set shows that an estimated 750,000 individuals — or nearly one in five of the total uninsured population in Texas — are non-citizens or illegal immigrants who are prohibited from purchasing insurance in the marketplace.

The Census Bureau’s 2018 findings showed almost 25 percent of the nation’s total uninsured are non-citizens.

Chris Jacobs, the founder of Juniper Research Group and author of The Case Against Single Payer, told The Texan, “We’ve seen an increasing focus on people being priced out of coverage.”

From the Census Bureau report, Jacobs pointed to the increase in the number of those uninsured with incomes above 400 percent above the FPL — essentially those in the middle-class with incomes of $50,000 and over.

“That’s important because 400 percent above poverty is the point at which people become ineligible for Obamacare subsidies,” Jacobs mentioned. The Obamacare subsidies are meant to offset premium costs — which average out to just under $600 per month, while the subsidies average a little over $500 per month.

Indeed, the marginal cost increase for incomes 400 percent over the FPL compared to 399 percent and below amounts to about $6,200 per year.

“The number of unsubsidized people on Obamacare plans has dropped by roughly half the last few years,” Jacobs explains.

He asserted this is occurring because the coverage is “unaffordable and/or doesn’t have value to millions of Americans.”

For coverage proponents, largely within politically progressive circles, the Census Bureau report painted a concerning picture and has been used by activists and politicians as a catalyst to call for Medicaid expansion.

Texas is one of 14 states that has not expanded Medicaid — the mostly federally-funded welfare program that subsidizes care for the indigent and lower-income individuals and families.

The expansion of that program to include able-bodied adults is one of three pillars of Obamacare: the other two being taxpayer-funded subsidies for the exchanges and federal health insurance regulations largely blamed by opponents of the law for driving up costs. 

The conservative Foundation for Government Accountability (FGA) asserts that Medicaid expansions have been far too costly for many state governments — which is a key reason that Texas has not opted for expansion — as individuals enrolled under the expansion are far more numerous than initial projections by the Congressional Budget Office and the Obama administration.

Indeed, the number of individuals enrolled in Medicaid is roughly 61 percent higher than original estimations. And according to FGA, Obamacare’s expansion of Medicaid has increased the number of total Medicaid recipients by more than 13 million individuals, with able-bodied enrollees now outnumbering the indigent and those with disabilities.

Some expansion states, like neighboring Louisiana, have seen costs to taxpayers and state governments double from initial claims. In 2015, Louisiana estimated spending for that state’s Medicaid expansion would total around $1.3 billion. Last year, that cost was an eye-popping $3.1 billion.

Mark Hill, a senior fellow at the left-leaning Brookings Institution, disputes the notion that Medicaid expansion is too costly, saying the bulk of the above-projected costs were incurred by the federal government since it pays for a vast majority of the program anyway.

According to the Congressional Budget Office, the federal government, on average, has a 63 percent share of Medicaid spending. That average fluctuates and is different for each state.

Although some experts, like Anne Dunkelberg of the Austin-based Center for Public Policy Priorities, emphasize that the federal share of the expansion is closer to 90 percent.

“Medicaid is far and away the best way to get your federal tax dollars back into the state budget,” Dunkelberg told The Texan.

Specifically, Medicaid expansion extends eligibility to those with an income at or below 138 percent of the federal poverty level (FPL). The current FPL is $12,490 for individuals, meaning anyone, including otherwise healthy and able-bodied adults, making $17,236.20 a year or less would be eligible for Medicaid coverage were Texas to expand it today. 

For a family of four, that number is $35,535 per year.

This is distinct from the Children’s Health Insurance Plan (CHIP), which provides children of low-income families with additional coverage. Formerly a state-run program, CHIP seeks to provide taxpayer-funded coverage to a population that doesn’t quite qualify for Medicaid, but for whatever reason may not be able to secure individual or employer-provided coverage.

The two programs cost roughly $600 billion a year. For a two-parent household in Texas with a child to qualify for CHIP, the combined annual income must be at or below $42,874.

Enrollment in Texas for both Medicaid and CHIP is under 4.2 million. CHIP enrollment in Texas decreased by over 1,000 from 2017 to 2018, while enrollment in Medicaid decreased by over 4,500 in the same time frame.

Applications for Medicaid and CHIP were generally declining in 2017 and 2018 but have climbed slightly this year. 

The Texas Department of Health and Human Services attributes the general decline to sustained positive economic conditions such as low unemployment levels.

Were Texas to expand Medicaid, an analysis by Kaiser based on 2017 numbers found that roughly 759,000 people out of 4,744,000 uninsured (16 percent of the uninsured), would become eligible for Medicaid where otherwise they are not. 

Following the Census Bureau report, Kaiser estimated Medicaid expansion would cover 1.1 million of the uninsured population — 341,000 more than their analysis found from the year before.

Other estimations place it at 1.5 million.

According to historical data from Kaiser, Texas’ uninsured rate has tracked above the national average since 2008 (as far back as their dataset will go) but has dropped from 24 percent to 17 percent in 2017 — despite the most recent uptick shown by the new Census Bureau numbers.

Since the Census Bureau began tracking the uninsured rate, Texas has maintained a relatively high uninsured rate.

Data pulled from U.S Census Bureau: 1987-2005, 2006-2012, 2013-2017, 2018

The numbers are based on the Annual Social and Economic Supplement to the Current Population Survey (CPS ASEC) and the American Community Survey (ACS).

These data points, of course, ignore two critical questions. What would the overall cost of Medicaid expansion be to Texas taxpayers and the State of Texas? And would an expansion in the name of coverage actually improve health outcomes for those on Medicaid?

Data pulled from the Texas Comptroller’s website.

As a share of total state spending, healthcare currently consumes 29.4 percent of total state expenditures according to the Texas Comptroller’s office. In 2011, prior to the implementation of Obamacare, healthcare consumed 18.4 percent.

That increase in the percentage of total state spending would likely be exacerbated were Texas to expand Medicaid.

Furthermore, Medicaid has long been at the center of a dispute over whether patients on the program have good health outcomes. Kaiser has reported in the past that Medicaid enrollees account for nearly 50 percent of long-term care spending.

And The New England Journal of Medicine famously issued a 2013 report on Oregon’s Medicaid program in which individuals enrolled in Medicaid for two years fared no better in measured physical health outcomes than similar groups who were uninsured.

In parts two and three of this series, we examine those two key questions and focus on healthcare costs in Texas and the overall quality of care. And specifically, we explore what impact expanding government programs such as Medicaid and Medicare would have on health outcomes for Texas patients.