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Medicaid Expansion, Its Benefits and Alternatives Essay


The Affordable Care Act was an attempt to expand coverage of healthcare insurance to include the families and individuals with low income. While conceived initially as a mandatory regulation, the 2012 Supreme Court Ruling created an opportunity for states to opt out of the expansion. While some concerns were voiced regarding the possible adverse effects of adopting the expanded policies, currently the data shows that the states which chose not to participate in the expansion are at a serious economic disadvantage, not to mention the persistent gap in insurance coverage. Because of these, some of the states which chose not to opt in are considering a number of alternative decisions aimed at mitigating the negative impact.

Analysis of Implication on Citizens

As of today, nineteen states have not adopted the expansion of Medicaid, with Texas being one of them. Following the 2012 ruling, Texas was among the first states to opt out. Rick Perry, then-governor of Texas, made it clear in his speech that the suggested scheme was inherently faulty and its adoption was unacceptable (Goodwyn, 2015). One of the central premises behind such view is the percentage of federal coverage of expenses, or, to be more exact, its planned reduction rate. Nevertheless, the aftermath of such decision is visibly negative.

First of all, a large percentage of low-income adults, the primary audience of the Affordable Care Act and its expansion, remain uninsured in Texas in 2016. It should be mentioned that the rate has dropped in the last few years, but the speed of decrease was far lower in Texas than in states with similar conditions which adopted the expansion. For instance, in both Arkansas and Kentucky, the rate dropped from 40% to below 20% (12% in the case of Kentucky, an almost threefold improvement). At the same time, the same rate dropped from 39 to only 27 percent in Texas – a far slower progression (Sommers, 2016).

The same populace also reported an ability to pay for the received care. While the amount of people who skip the intake of prescribed medication is traditionally lower in Texas than in the compared states, the latter demonstrated significant improvement of these metrics (roughly a one-fourth decrease), while Texas only managed to cut the rate by one percent (Sommers, 2016). Finally, the quality of hospital care visibly suffers from opting out of the expansion. In accordance with federal law, hospitals are forbidden to turn down sick patients who are incapable of paying for health services. Such setup inevitably leads to the growth of “uncompensated care” – the expense resulting from treating uninsured patients. While the federal government provides compensation for the phenomenon, its amount was significantly decreased with the introduction of expansion. In other words, Texas suffers from drawbacks of ACA expansion without using its benefits.

Potential Opportunities and Challenges of Opting in the Expansion

Currently, there is no deadline for opting in, which means that the state can change its decision at any time. In fact, such decision presents several lucrative opportunities. First of all, the uncompensated care mentioned above can be covered to a large degree after the adoption of expansion. For instance, Dallas’s Parkland Hospital, which currently faces a significant sum of $765 million of uncompensated care every year, could obtain about $580 million to cover it as a result of the ACA expansion program. Aside from that, there are other financial considerations. Both personal and corporate income taxes, which are paid by Texans, essentially go to other states to cover their citizen’s insurance.

According to the study by Glied and Ma (2013), Texas remains the most heavily impacted by the decision not to opt in: the net loss resulting from paying taxes without seeing a return in the form of government subsidiaries is estimated to reach $9.2 billion by 2022, which is almost twice as much as Florida (second place with $5 billion) (Glied & Ma, 2013). Finally, the health insurance premiums in Texas are among the most expensive in the country, second to Florida. This means, among other things, the excessive spending of the property taxes to compensate the expenses faced by the healthcare providers. All of the mentioned drawbacks are at least partially resolved by opting in the expansion.

However, the adoption is not without its challenges. For example, the federal coverage of costs, which is currently complete, is planned to gradually decrease, with 95% in 2017, 94% in 2018, and down to 90% in 2020 (Glied & Ma, 2013). It must be acknowledged that due to the challenges faced by government budget, the decrease might continue beyond 2020, laying a gradually heavier financial burden on state budgets. At the same time, there is currently no legally justifiable way to retract the participation in the expansion, which means that regardless of the presence of unforeseen challenges, Texas will be left with the expanded ACA policy. Nevertheless, it should also be acknowledged that currently the government only covers only 57 percent of the Medicaid expenses – an amount significantly smaller than the most pessimistic predictions.

Alternative Approaches

Several states introduced alternative approaches to improve insurance coverage. For instance, Pennsylvania adopted the Healthy Pennsylvania program which provides benefits similar to those of the Medicaid expansion by covering private health plans using Medicaid funds. The program came into effect in 2015 with full implementation planed in two years. Starting from the second year of implementation, the beneficiaries are eligible for additional copayments and can opt for premium reduction by participating in Encouraging Employment Program or qualifying for healthy behavior criteria (Garber & Collins, 2014).

Iowa adopted two mutually supporting plans. The Iowa Wellness Plan covers the beneficiaries with income of up to 100% of poverty with an additional premium, while the Iowa Marketplace Choice Plan provides payment for private health plans of those between 100 to 138 percent (Garber & Collins, 2014). Again, beneficiaries need to qualify for certain healthy behavior criteria.

Both plans use the same percentiles as the Medicaid expansion program but introduce additional regulations and a more detailed set of conditions for eligibility. The Pennsylvanian version also breaks down the implementation into two steps to mitigate possible adverse effects. This is done primarily to downscale expenses which may arise on the initial stage. However, such approach also introduces unnecessary complexity to the scheme and may later result in unpredicted adverse effects.

Conclusion and Recommendations

Considering the benefits of opting in the expansion and the relatively insignificant weight of the possible challenges (not to mention their speculative background), it is recommended for Texas legislature to reconsider the possibility of opting in. The possibility of devising a waiver and adopting alternative program which can improve accessibility to healthcare can be considered, but the lack of proof of its superiority over the Medicaid expansion makes it largely an ideological issue. Thus, the risks, as well as expenses associated with its development, maintenance, and implementation, are not necessarily justified. As a result, adopting the expansion remains the best option for the state of Texas.


Garber, T., & Collins, S. R. (2014). Web.

Glied, S., & Ma, S. (2013). How states stand to gain or lose federal funds by opting in or out of the Medicaid expansion. Issue Brief (Commonw Fund), 32, 1-12.

Goodwyn, W. (2015). Texas politicians and businesses feud over Medicaid expansion. Web.

Sommers, B. D. (2016). . Web.

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IvyPanda. (2020) 'Medicaid Expansion, Its Benefits and Alternatives'. 10 August.

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