Texas Governor Refuses to Implement Insurance Exchange, Expand Medicaid

July 10, 2012

Texas won’t be working on the implementation of a health insurance exchange, one of the key provisions of the federal healthcare reform law that was recently upheld by the U.S. Supreme Court, any time soon.

In a letter to U.S. Health and Human Services Secretary Kathleen Sebelius, Texas Gov. Rick Perry confirmed that Texas has no intention of implementing a state insurance exchange or expanding Medicaid as part of the Patient Protection and Affordable Care Act (PPACA), which was passed by Congress in 2010.

In an announcement, Gov. Perry objected to what he said was a mandate that state exchanges be approved by the Obama Administration and operate under specific federal rules, many of which have yet to be established.

He said an expansion of Medicaid would bring millions of additional Texans into an already unsustainable Medicaid program, at a potential cost of billions to Texas taxpayers.

“The PPACA does not truly allow states to create and operate their own exchanges,” Gov. Perry stated in the letter to Sec. Sebelius. “Instead, it gives the federal government the final say as to which insurance plans can operate in a so-called ‘state’ exchange, what benefits those plans must provide, and what price controls and cost limits will apply. It leaves many questions to be answered later through federal ‘future rulemaking.’ In short, it essentially treats the states like subcontractors through which the federal government can control the insurance markets and pursue federal priorities rather than those of the individual states.”

The governor’s announcement indicated that he has frequently called for the allocation of Medicaid funding in block grants so each state can tailor the program to specifically serve the needs of its unique challenges.

Perry has advocated a transformation of Medicaid into a system that reinforces individual responsibility, eliminates fragmentation and duplication, controls costs and focuses on quality health outcomes.

This would include establishing reasonable benefits, personal accountability, and limits on services in Medicaid. It would also allow co-pays or cost sharing that apply to all Medicaid eligible groups — not just optional Medicaid populations — and tailor benefits to needs of the individual rather than a blanket entitlement, according to the announcement released by his office.

 

 

 

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