Texas' Aversion to Obamacare Could Leave Hospitals in a Budgetary Bind

Mar 16, 2016

Hospitals around the state are in a serious time crunch. Administrators are currently drafting their budgets for the next fiscal year, but a big chunk of federal funds they’ve relied on in years past isn’t a sure thing this time around.

Texas hospitals are waiting for news about the future of some Medicaid funds—specifically, the state’s 11-15 Medicaid waiver, which expires this September. State officials applied last fall for its renewal, but they haven’t gotten word yet. Ted Shaw is the President and CEO of the Texas Hospital Association, a group that represents about 460 hospitals in the state. Shaw says these hospitals need to know now.

“In order to be able to plan appropriately for what services are going to be provided and what revenues and expenses they are going have, they need to know now some predictability around those things,” he says.

The state’s hospitals are caught in a kind of proxy war over the Affordable Care Act. The problem here is that this Medicaid waiver wasn’t designed to be used like this for long: The 11-15 waiver was created as a temporary funding measure for hospitals to provide health care to folks without insurance. Another part of the waiver provides funding for a range of health care services in the state.

“These are huge critical payments that come to the health care industry to help the uninsured,” Shaw says.

These funds were supposed to become unnecessary once Texas expanded Medicaid through the Affordable Care Act, but that, of course, hasn’t happened. It's now up to the federal government whether the state’s request for a new waiver will be granted.

Shaw says if they don’t approve it, the state's health care system could face serious consequences.

"If there is no money, you can’t afford as many people," he says. "So we would be down in jobs, and we would have to cut back services.”

For now, the state is asking for a short-term waiver that covers 18 months. During a recent meeting at the state legislature, lawmakers asked Health and Human Services Executive Commissioner Chris Traylor how his talks with the Centers for Medicare and Medicaid Services were going.

Traylor says the feds are still gathering information and that they understand the pressure hospitals are facing.

“I think they indicated an understanding of the importance of getting a decision to us so our health care providers could have a level of certainty,” he says.

In the end, though, it’s the federal government’s call.

The whole point of the health care law was to get uninsured people health insurance, so they could see a doctor and avoid a trip to the hospital.

That would let the government stop paying for uncompensated care at hospitals like Texas is asking it to do with another waiver. But in the meantime, this is what the state is facing: more uninsured people than any other state in the country. And they have to go somewhere.