A (Potential) Federal Fix to Texas’ Medicaid Coverage Gap

Despite strong support among Texans in multiple polls, a bipartisan majority of Texas House members supporting a coverage expansion bill, and a $3.9 billion bonus for Texas authorized by Congress, the Texas Legislature’s 87th Regular Session ended without the adoption of any bills or budget measures to reduce the uninsured population through Medicaid expansion. 

Now that Louisiana, New Mexico, Arkansas, and Oklahoma have all expanded Medicaid, Texas is among only 12 states where uninsured working poor adults lack a health coverage option while their neighbors  — earning just a few dollars more — can get low-cost coverage from the Affordable Care Act (ACA). Like Texas, other non-expansion states are facing resistance to Medicaid expansion from conservative leaders fearful of losing support in elections, regardless of popular support or the urgent need of their constituents. Slow recovery from the COVID-19 pandemic economic downturn is bypassing low-income workers, and 75% of the uninsured Texans who could get covered under Medicaid expansion are people of color

In response, proposals have arisen for Congress to establish a coverage option for uninsured adults in Texas and the 11 other non-expansion states that are excluded from both Medicaid and the ACA Marketplace’s subsidized health coverage. Two broad options being discussed are for Congress to:

  1. Tell the federal Medicaid agency to run a special Medicaid program for the excluded adults in the states that won’t expand, or
  2. Allow people currently excluded from Medicaid and ACA coverage to enroll in marketplace coverage.

These concepts have not been fleshed out in bill filings. You can read more about them in analyses from the Kaiser Family Foundation, and the Center on Budget and Policy Priorities.

A third, more specific proposal, the COVER Now Act, has been filed by Texas Congressman Lloyd Doggett. Under this bill, counties and groups of counties could set up local or regional Medicaid expansion directly with the federal Medicaid agency, without requiring the approval of the Governor or state legislature. The counties and groups would request a special new “waiver” that would grant them the same beneficial federal funding made available to states that expanded in 2014:  100% federal funding for three years, phasing down to 90% federal funding in year 10. Rural counties would get the 100% federal funding for four years. Other provisions require states to let expansion jurisdictions use state Medicaid enrollment systems and would pay states through a large matching funds increase, while also prohibiting state governments from retaliating against the expansion areas.

Each of these approaches has its limitations and challenges. Each would also be superior to the grave moral failure and structural racism represented by Texas’ status quo. Every Texan and other Texas advocates call on the president and Congress to include a commitment to fund and implement a federal solution to the Medicaid coverage gap in the next Budget Reconciliation bill

Read More: Correspondence and Opinion Calling for a federal fix to the Medicaid Coverage Gap

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