Thursday's court ruling, is, to paraphrase the vice president, a really big deal for the country and for Texas.
For the very first time, the U.S. will create a system to guarantee a decent standard of health care will be affordable for every lawfully present American. The sliding-scale system is not perfect, but it is a huge step to be finally starting down that road.
The second fundamental shift will change the ground rules for the health insurance marketplace, so that insurers can no longer profit by avoiding people with health care needs; instead, they will have to win business through good care management, good pricing, and good customer service. In 2014, no one can be turned down and no one can be charged more because of their health status. This profound change will also liberate Texans trapped in a job today just to keep their coverage.
Thirdly, the Affordable Care Act (ACA) launched dozens of policies designed to get health care spending under control, so it is not growing faster than general inflation. As a country and a state, we have enormous work ahead of us here, as every single health care sector will fight back to maintain its maximum profits, but to be started down this road at all is crucial to our fiscal future and we should not let politics derail this effort.
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Our nation and our state need a strong middle class, and the middle class needs the security that no matter what health calamities befall their family, they can always buy insurance that provides good care — and be assured that health costs will not bankrupt them. The ACA requires low- and moderate-income families to put up a fair share of income for premiums, but for the first time it caps the percentage of their income that goes to premiums, plus it puts an annual cap on out of pocket spending (and this last cap extends to all of us, not just lower-income folks). That’s what makes the difference between a really bad health year and a personal bankruptcy.
Some Texas specifics: Texans already benefiting can hold on to those gains — seniors paying lower drug costs and getting preventive tests with no out-of-pocket costs, kids with pre-existing conditions enrolled in coverage, young adults on their parents’ insurance plan and millions whose insurance no longer has lifetime limits. After today’s decision, Texans whose insurers spent less than 80 cents of every premium dollar on health care in 2011 will still get $167 million in refunds this summer because of the ACA.
Experts’ best estimates are that even moderate sign-up for the 2014 coverage expansions — through both Medicaid and sliding-scale premium help with private insurance – will cut the number of uninsured Texans in half. (Currently, 6.2 million Texans don't have health coverage.) And the new coverage will be financed overwhelmingly by the federal government. The Texas Health and Human Services Commission's own estimates project that the Medicaid expansion between 2014 and 2019 would bring $76 billion new federal dollars to the state, with Texas putting up about $6 billion from the state budget for our share of the Medicaid expansion. That $6 billion over six years is far less than Texas hospitals now spend on the uninsured in a single year, largely with local property tax dollars.
Of course, the wild card in today’s decision is that states that fail to implement the Medicaid expansion (covering adults to 133 percent of the poverty line, or $25,390 for a family of three), will not be subject to losing their entire Medicaid program. In Texas today, 2.5 million children have Medicaid, but fewer than 10 percent of their parents are covered. Without the Medicaid expansion, uninsured adults below poverty will simply be left uninsured, and seeking care from our public hospitals. Despite the hard evidence of the economic benefit to Texas, our current leadership’s opposition to the ACA signals that a major campaign will be needed for our state to take the smart step. And advocates are ready for that challenge.
Remember, a few years ago we had to work hard to overcome leadership opposition to the Children’s Health Insurance Program (CHIP), too!
Anne Dunkelberg is the associate director of the Center for Public Policy Priorities, a liberal think tank in Austin.
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