Is Expanding Medicaid a Good Idea for Texas?

money11111“I offer three perspectives as to why Texas should not expand Medicaid” – Alan M. Preston, MHA, Sc.D.

Is Expanding Medicaid a Good Idea

Below is an article that appeared in the Sunday section of the San Antonio Express News Op-Ed Section. The gist of the article is that there are three compelling reasons why states need to push back on the federal government as opposed to caving to every demand the federal government makes upon a state.

  1. Expanding more social programs is expensive regardless if the taxpayer pays for it at the federal level or the state level.
  2. Our constitution was designed to assure that the federal government would have limited powers. Every time a state allows the federal government to push them around, the idea of a limited federal government is diminished
  3. Expanding a system in need of repairs makes little sense. Adding more people to a system with the same number of doctors will crowd out many Medicaid recipients that need to use the system.

Feel free to read the article below for the details or click on the edited link above to read it as published in the paper.  Hope it makes you all think.

Is Expanding Medicaid a Good Idea for Texas?


Alan M. Preston, MHA, Sc.D.

There are 32 states[1] in the United States that decided to expand Medicaid in their state under the Affordable Care Act (ACA).  Texas, along with 19 other states, have not expanded Medicaid under the ACA.  This is a topic that has strong opinions for expansion and strong opinions against expansion.  I offer three perspectives as to why Texas should not expand Medicaid.  One reason is the cost to taxpayers, one is the proper role of the Federal Government, States rights and sovereignty under the US Constitution and last but not least is that expanding a system that undervalues the physicians for the patients they manage is not a solution.

Why would any state expand a system that is in need of reform?  There is a reason that so few physicians participate in Medicaid.  And one reason is the stringent administrative demands placed upon doctors in interacting with both federal and state agencies all the while, those doctors receive the least amount of reimbursement for treating a very complex group of patients. Putting more people into a system which overburdens and underpays the providers will only create longer waiting times for the population that Medicaid intends to serve.  And states have had a difficult time receiving waivers from the federal government that would allow states more flexibility in managing such a challenging population. And there is the issue of costs.


It is concerning when people say: “let the Federal government pay for it”; as if somehow the taxpayer has no role in funding the spending habits of the federal programs.  Think about a pair a pants with two pockets in the front.  The right pocket holds cash for taxes of the state, while the left pocket has cash for the federal government. Regardless if spending is obligated by the state or the federal government, the tax payers have their money confiscated out of their pockets and transferred to both the state (sales taxes, fees, property taxes for local spending, etc.) or the federal government (income tax, capital gains tax, etc.). Thus the argument that somehow the Medicaid expansion will not cost a state tax payer is 100% incorrect.  The tax payer at the state level is likely the same tax payer at the federal level.  Attempting to rationalize a distinction is at best an intellectually dishonest argument.


Medicaid was enacted in 1965. The program offers federal funding to States to assist pregnant women, children, needy families, the blind, the elderly, and the disabled in obtaining medical care. States had the option to adopt the shared funded program and, depending how many Medicaid members were disproportionately poor, the Federal government offered States more money as an incentive to expand the services and eligibility of Medicaid.


For many states, the amount of money they have to raise in taxes from the citizens of that state is enormous and represents about 20% to 40% of the State’s budget overall.   States not only agree to pay a share of the amount that is paid to providers that care for the Medicaid members, the state must fund the administrative costs in their respective state to run the program.

In Texas, tax dollars spent on Medicaid, in 2013, including Supplemental Health Care Payments was $33 billion! The average number of Texans that are on Medicaid in a given month is approximately 4 million[2].  The amount Texas spends on all government programs including local schools is approximately $239 billion.  When Medicaid is added to other state healthcare expenditures[3], the number increases to $50 billion. The amount we spend on all of education (k-12 and higher education) in the state of Texas is $73 billion. Education and Healthcare account for over 51% of the state’s budget including local spending.

Since the ACA mandates that everyone must have health insurance, the federal government provided health insurance to citizens that make too much to be eligible for Medicaid but still too little to pay for health insurance.  Whether the state created its own exchange or relied on the federal insurance exchange, every citizen is allowed to have part of their care subsidized by the federal government if their income is less than 400% of the Federal Poverty Limit (FPL).  For a family of four, 400% of FPL suggest they have to make slightly less than $100K to be eligible for a federal subsidy.

If the state of Texas were to expand the Medicaid offering, it is likely the expansion would be similar to what California experienced[4] and that was a 51% increase in Medicaid recipients. Thus a 50% increase would drive the number up to 6 million on Medicaid and the added 2 million Medicaid members would not all be funded by the Federal government.  Texas would be responsible for at least 10% of the added 2 million. Texas tax payers would have to pay approximately $3.3 billion of the increase at the state level and another $33 billion at the federal level, in addition to the existing $33 billion paid at the state level and another 33 billion paid at the federal level.  Is it any wonder there is a $19.5 trillion national debt?



The cost alone is a compelling argument; tax payers would have to fund free healthcare if Medicaid was expanded.  Yet there is another compelling argument against the federal mandated Medicaid expansion and that is constitutional.  Our forefathers when designing the constitution wanted to make sure that the federal government had limited power and only power enumerated to it by the people. Powers not enumerated to the federal government are reserved to the state and the people according to the 10th Amendment of the US Constitution.

In the original ACA passed in 2010, it mandated the expansion of Medicaid to the states. Many states sued the federal government suggesting the mandate was coercive and unconstitutional. The law mandated that if a State did not comply with the Act’s new coverage requirements, it would lose the federal funding for all federal Medicaid funds.  The federal government has over the years used federal funding as a way to inspire states to adopt programs that the government cannot provide as a matter of constitutional law and attempt to compel states to adopt federal social policies.

The Constitution has never allowed Congress to confer ability to require the States to govern according to Congress’ mandates.  Otherwise, allowing Congress to tell the states how to govern    would give way to a system that vests power in one central government, and individual freedoms and liberty would essential vanish. The Supreme court has struck down federal legislation that commandeers a State’s legislative or administrative apparatus for federal purposes.  When Congress’s pressure turns into compulsion, the compulsion runs contrary to our system of federalism. The Constitution does not give Congress the authority to mandate the States to regulate as Congress see fit.  That is true whether Congress directly commands a State to regulate or indirectly coerces a State to adopt a federal regulatory system as its own. Congress essentially suggested in the ACA a take it or leave it stance when it came to Medicaid expansion.  That coercive action was found to be unconstitutional.


Our constitutional framers were careful not to allow the federal government to have unlimited power.  Their concern was that when governments have unlimited power, they use that power at the expense of the individual’s freedoms and liberties. In the Federalist Papers (47-51), Madison wrote compellingly that government needs to be constrained. Failure to constrain government leads to a tyrannical form of government. Madison said: “But what is government itself but the greatest of all reflections on human nature? If men were angels, no government would be necessary”.  Madison knew that men were not angels and as such when they acquired power those men needed to be constrained.  Madison said it best when he said: “the great difficulty lies in this: You must first enable the government to control the governed; and, in the next place, oblige it to control itself”. Federalism which is a system of government in which entities, such as states, share power with a national government. The United States government functions according to the principles of federalism. And the key here is that states share power, they are not subservient to the federal government and in fact powers that are not expressly enumerated to the federal government are reserved for the states and the people.