Texas is one of several states whose governors say they will not expand Medicaid to implement the new health care reform law. Although the U.S. Supreme Court upheld the law, the court gave states the option to expand Medicaid. Naturally, the federal government seeks to give reluctant states an incentive to expand. From the New York Times:
Citing [the U.S. Supreme Court] decision, Cindy Mann, the federal official in charge of Medicaid, said, “A state may choose whether and when to expand, and if a state covers the expansion group, it may decide later to drop the coverage.”
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Under the new law, she said, the federal government will pay the entire cost of Medicaid coverage for newly eligible beneficiaries for three years, from 2014 to 2016. The federal share will decline to 95 percent in 2017, 94 percent in 2018, 93 percent in 2019 and 90 percent in 2020 and later years.The federal payment rates “are tied by law to the specific calendar years noted,” Ms. Mann said. So if a state defers the expansion of Medicaid to 2016, the federal government will pay 100 percent of the costs for only one year. After 2016, the federal share will drop to the levels specified by Congress, and states will be responsible for the remainder.
Last month, pro-expansion Texans gathered at the state capitol to protest the governor. An article in the Austin Statesman sheds more light on why Governor Perry doesn’t want to expand Medicaid:
Perry has said that Medicaid is broken and that adding millions more Texans to it could financially ruin the state. Texas already has a $4 billion to $5 billion shortfall in the 2011-12 Medicaid budget, and expanding the government health care program that serves low-income, disabled and senior Texans would increase state spending by $27 billion by 2023, according to state officials.