Obamacare Cash Helps Pay State's Medicaid Bill

Texas Republicans have long considered the Affordable Care Act a favorite political punching bag. But that hasn’t stopped state budget writers from spending extra money flowing out of Washington under the law sometimes known as “Obamacare.”

Facing a $338 million unpaid bill for Medicaid, the state’s health insurance program for the poor and disabled, lawmakers on the House Appropriations Committee voted Tuesday to help pay for it with a $102 million cash infusion that came from the feds under President Obama's signature health law. But that’s not how lawmakers say the information was presented to them.

“No one indicated that it had anything to do with the ACA,” said state Rep. Sylvester Turner, D-Houston, the committee’s vice chairman. “Many individuals are running away from the ACA, but then we’re taking the benefits, and we’re using the benefits, at least at this point, to pay down on the unfunded Medicaid bill.”

Each legislative session, lawmakers usually must pass a supplemental budget bill to pay for unexpected costs and IOUs, so it was a pleasant surprise for budget writers to hear there was a $102 million surplus in Medicaid’s “Integrated Eligibility and Enrollment” program. That’s agency jargon meaning the federal government started paying a greater share of Texas’ administrative costs to run Medicaid.

“That was under the ACA,” said Stephanie Goodman, a spokeswoman for the Health and Human Services Commission, the state’s largest health agency. “We were not sure we were going to get it.”

It had previously been unclear, Goodman said, whether Texas would qualify for the more generous federal reimbursement, which was designed with the assumption that the state would expand its Medicaid program to cover low-income adults. Texas’ Republican leadership has consistently opposed Medicaid expansion, a central tenet of the health law, criticizing the public insurance program as inefficient. 

The $102 million was apparently the single largest Easter egg state officials found in the health budget. In total, the five health and human services agencies reported $278 million in unspent funding for various programs.

That included money intended for services for low-income Texans, like the Children’s Health Insurance Program, which had $15.3 million left over, and the Texas Women’s Health Program, with $4.5 million unspent. Both programs saw lower-than-expected enrollment, which the health commission attributed in part to the Affordable Care Act.

The women’s health program in particular saw lower-than-expected enrollment, according to the agency, because more women were purchasing subsidized Obamacare plans on the federal exchange. Federal data show roughly 1.2 million Texans signed up for coverage.

But the leftover money from CHIP and the women’s health program, plus surplus funding earmarked for mental health services, will not go toward paying down the state’s Medicaid deficit, state Rep. John Otto, R-Dayton, told the appropriations committee, which he chairs.

Last week, Democrats wondered why budget writers would leave health funding on the table in a state that has the highest rate of people without insurance.

“No one can argue there are tremendous unmet needs dealing with health and human services, often more needs than we have money to appropriate,” Turner said in an interview. Otto did not return a phone call seeking comment.

This story was produced in partnership with Kaiser Health News, an editorially independent program of the Henry J. Kaiser Family Foundation, a nonprofit, nonpartisan health policy research and communication organization not affiliated with Kaiser Permanente.