Stateline Story

Texas Sees 'No-Win Dilemma' in Medicaid

Arizona has generated national attention in recent weeks for its decision to stop paying for life-saving organ transplants under the state's Medicaid program. The decision — made in the face of a severe fiscal crisis — has been portrayed as one of the recession's sharpest state budget cuts .

In Texas, however, some Republican lawmakers — and Governor Rick Perry — have talked not only about dropping certain procedures and benefits under Medicaid, but about dropping out of the program altogether. They say the state can no longer afford the 45-year-old, state-federal health insurance program for the poor.

On Friday (December 3), a long-awaited state study quantified what such a decision would mean for Texas.

The study, by the Texas Department of Insurance and the state's Health and Human Services Commission, found that as many as 2.6 million residents would lose their health insurance if Medicaid were abandoned. Many of those losing coverage would be pregnant women and babies, as the Austin American-Statesman noted . Texas would also lose $15 billion a year in federal assistance, or about a tenth of the state's entire health care sector.

Keeping Medicaid without reforming it, however, is also not a viable option, according to the study. Rigid federal rules and a dramatic expansion of the program under the new federal health care law leave it on an unsustainable path in Texas — a "no-win dilemma."

"We have to reform the program to save it," Stephanie Goodman, a spokeswoman for the Texas Health and Human Services Commission, told The Dallas Morning News , which noted that Nevada and Wyoming are among other states that have studied dropping out of Medicaid.