Health Leaders Say They're Ready for Federal Reforms — If They Must Be

Like it or not, Texas lawmakers know they may eventually have to implement federal health care reforms.

On Monday, state officials at a joint meeting of the House Insurance and Public Health committees told lawmakers that Texas is ready to move forward with President Obama's health care reform package next month, regardless of whether the U.S. Supreme Court strikes down parts or all of it.

"It has been a balancing act trying to determine how much planning to do versus waiting for the outcome," Billy Millwee, the deputy commissioner of the Health and Human Services Commission, told the panel. "I don’t think we have lost anything, given the unknown factors. Even compared to those states who’ve reached out to embrace the Affordable Care Act, we’re going to be well-positioned."

House Public Health Committee Chairwoman Lois Kolkhorst, R-Brenham, started the nearly five-hour meeting with a stern warning for members to keep politics out of the discussion and to refrain from using "slang" — i.e., "Obamacare" — to describe the federal health care legislation.

Dr. Thomas Saving, an economics professor at Texas A&M University and a former trustee of the Social Security and Medicare trust funds, offered a grim picture. He said Medicare and Medicaid are essentially unfunded liabilities for the federal government, including estimates that by 2020, 19 percent of payroll taxes would be needed to pay for Medicare, 37 percent by 2058, and 49 percent by 2080. To balance Medicare's budget, he said, nearly 20 million people nationwide would have to be denied benefits by 202o.

“The elderly are going to pay more. There’s no doubt about it," Saving said, adding that new health care mandates mean the federal government can "balance their budget by putting (states) in the hole.”

Democrats on the panel took issue with some of Saving's figures and with his argument that preventive services don't create savings in the long-run. Noting the underlying political tension, state Rep. Garnet Coleman, D-Houston, said that the expansion of Medicaid — and federal matching rates along with it — occurred under both the Bush and Obama administrations.

Lawmakers remain concerned over how Texas will fund the expected increase in Medicaid patients. The Health and Human Services Commission predicts that by the end of 2014, Medicaid will expand from 3.5 million beneficiaries to 4.7 million. HHSC is still calculating the actual cost to taxpayers, but it could be as much as $27 billion over the first 10 years, with the federal government paying for nearly all the cost of the new law in the first two years.

For now, HHSC's Milwee said that his agency is complying with new requirements meant to improve the integrity of the entitlement enrollment process by increasing audits, identifying overpayments and increasing reimbursements to primary care physicians, among other measures.

On the insurance side, Katrina Daniel, associate commissioner at the Texas Department of Insurance, said her agency recently returned $900,000 of a $1 million grant to explore insurance exchanges that will be required for every state in 2014. However, it used all of a $2.8 million grant to start the Consumer Health Assistance Program, a hotline that helped 9,000 Texans during the last year. The program ends in April, despite several pleas from the public to keep it as an educational tool for first-time policyholders.

Information about the number of Texans who are benefiting from the Affordable Care Act's immediate provisions is gradually trickling into the insurance department, and officials cited a federal report showing that more than 4,000 Texans have signed up for high-risk insurance plans designed to benefit people with pre-existing health conditions.

The majority of advocates who testified argued in favor of complying with the federal reforms. Speakers from liberal groups like Texas Impact and the Center for Public Policy Priorities praised the program. Aside from those who gained insurance coverage because of the new pre-existing conditions rule, they said more than 2 million young Americans between the ages of 19 and 25 have been able to stay on their parents' insurance policies. They also said that 1.4 million Medicare patients received preventive services without a co-pay, small employers have received tax credits and premium hikes are subject to more scrutiny. Under the new program, they said, large employers like American Airlines and Southwest Airlines have received more than $425 million in federal support to cover early retirees, the lives of children with pre-existing conditions have been saved, more than 1 million people received discounts on brand-name drugs and consumers will receive $160 million worth of rebates next summer.

Despite those developments, lawmakers expressed concern over the cost of enforcing the federal rules and whether illegal immigrants would be able to receive care at taxpayers' expense. 

"I'm most worried that small businesses with 50 or more people will possibly push out their employees to get coverage from the government," Kolkhorst said after the meeting.