Zerwas Proposes Alternative to Medicaid Expansion

Amid hours of testimony from advocates in support of Medicaid expansion on Tuesday, state Rep. John Zerwas, R-Simonton, described his proposal to create an alternative program that could draw down federal financing to provide health coverage for poor and uninsured Texans.

“I think it’s incredibly important that we do something that can be discussed and debated on the floor of the House,” Zerwas said before outlining House Bill 3791 during a meeting of the House Appropriations Subcommittee on Budget Transparency and Reform. “I think the citizens of Texas expect us to have that conversation.”

“The bill is intended to not be an expansion of Medicaid,” he added.

HB 3791 would require the state’s health commissioner to craft a “Texas solution” to health care expansion by pursuing a waiver or authorization from the federal government to reform Medicaid while expanding coverage to poor adults. Under Zerwas’ proposal, the waiver must be cost-neutral and allow Texas to leverage tax revenue collected from premiums on health care plans to pay for the state’s portion of the program’s costs. It must also allow the state to save money by tailoring Medicaid recipients’ benefits, implementing “personal responsibility” cost-sharing measures, such as co-pays and deductibles, and prioritizing premium assistance for private market health plans.

If negotiations with the federal government were to fail, the bill would require Texas to set up the same program with state funds.

“This is intended to try to promote personal responsibility,” said Zerwas, explaining that the program would support many options for poor individuals to find health coverage through the private market. “It’s not a one-size-fits-all.”

The bill was left pending in committee.

State Rep. Garnet Coleman, D-Houston, a joint author on Zerwas’ bill, said it would allow the Legislature to weigh in on the best way to cover the poor and uninsured.

“Let’s take what we want up there and let’s advocate for what the majority of the people in this Legislature think,” he said. As an example, he said, the bill would allow the state to help people who want one to obtain a health savings account. 

Gov. Rick Perry and the majority of state Republicans remain firmly opposed to federal health reform and Medicaid expansion. Perry and others would rather the state seek a no-strings-attached block grant to redesign Medicaid and curb the program's exponentially rising costs.

“Everyone thinks Medicaid is unsustainable,” said state Rep. Myra Crownover, R-Denton, the chairwoman of the subcommittee. "There’s definitely a need. I don’t think there’s consensus on how to address the need.”

Zerwas said HB 3791 would not preclude the state from seeking a no-strings-attached block grant from the federal government, which he agreed would give Texas the “ultimate flexibility” to redesign Medicaid. But Zerwas said the no-strings-attached grant is not a realistic option for Texas.

Arlene Wohlgemuth, the executive director of the conservative Texas Public Policy Foundation, was the only person to testify on behalf of an organization opposed to the bill. 

“I don’t believe that it is possible to get a waiver that will accomplish what needs to be accomplished, that’s why we have been so strongly in favor of a block grant,” she said. 

While the bill attempts to reach a private-market solution and claims not to be an entitlement or an expansion of Medicaid, she said it “is too close to Medicaid expansion.” She explained that the bill would still require Texas to meet federal Medicaid requirements, which could increase the state’s costs and deter some individuals from receiving private coverage through the health insurance exchange.

The committee considered Zerwas’ proposal after discussing House Bill 3376, by state Rep. Sylvester Turner, D-Houston, which would expand Medicaid under the Affordable Care Act. The committee left Turner's bill pending.

Turner said his legislation included many provisions, including wellness incentives and cost-sharing requirements, that are supported by conservative groups such as the TPPF.

“No one here is making a serious case that Texas comes out better for not taking the federal Medicaid money,” said Bee Moorehead, executive director of the interfaith advocacy group Texas Impact. “What we’ve heard all session is opposition to the Medicaid expansion is ideological.”

While some advocates may have concerns with the particulars of Zerwas’ or Turner's bills, Moorehead said Texas Impact supports any solution that allows Texas to draw down the federal money and provide adequate health care coverage for poor and uninsured Texans.

The Texas Medical Association and Texas Hospital Association, the state's two largest health trade associations, also testified in favor of Zerwas' proposal.

During the hearing, advocates for reform from across the state said Medicaid expansion would benefit businesses, children, the mentally ill and veterans.

Mimi Garcia, organizing director with Texas Well and Healthy, presented the committee with a list of 37,000 Texans who had signed petitions supporting Medicaid expansion under the Affordable Care Act. She read lawmakers a list of more than 90 organizations and 18 chambers of commerce that also support expansion.

Blake Hutson, a grassroots organizer with Consumers Union, said refusing to expand Medicaid could cost Texas businesses more than $300 million. Businesses, he said, will be required to pay additional penalties for workers who do not have employer-provided health insurance, according to a report by Jackson Hewitt Tax Service.

“This is simply a math problem, and there is really only one right answer in their minds,” said Lan Bentson, co-founder of Frontera Resources, a Texas-based international oil company, testifying in favor of Medicaid expansion. Texas is already paying to care for the uninsured, and it harms the business community when workers can’t access health services, he said. “You’re really trying to avoid a $90 billion oops.”