Impacts of Texas’ Failure to Expand Medicaid Program

Impacts of Texas’ Failure to Expand Medicaid Program

The Affordable Healthcare, which is also known as the Obamacare, was enacted in 2010. The primary aims of the legislation are to provide the American citizens with affordable health care services, enhance Medicaid program, and promote innovation in health facilities for better service delivery at low costs (Saltzman & Eibner, 2016). However, there has been opposition in Texas regarding the Affordable Healthcare Act, which was led by Texas’ Senator Ted Cruz. Since Cruz took over as the Texas’ Senator, he has been on the forefront of revoking the implementation of Obamacare in Texas. Basically, he firstly made an appeal to repeal the legislation, which was co-sponsored and supported by over 30 Republicans (Cruz). Therefore, Texas has since been reluctant to implement the Healthcare Act due to various reasons. For instance, Senator Cruz argues that the implementation of the Obamacare would lead to loss of jobs, increase in rates of premiums, and people would be forced to work extra jobs to afford health care (Cruz). A comprehension on the misunderstanding in regards to Health Care Act between the state of Texas and the federal government requires an understanding of the situation.

A study carried out in 2015 comparing rural hospitals under Medicaid expansion and non-expansion states in regards to profitability and uncompensated dollar revealed an accumulative unrecovered debt in non-expansion states (Rountree & Wu, 2016). For example, Parkland Memorial Hospital in Texas has accumulated a total of $765 million as uncompensated care costs from the treatment of the uninsured (Mangan, 2015). Therefore, this is an indication that Texas denial to implement Medicaid would incur financial losses. Moreover, a state’s decision to avoid incorporating Medicaid services would increase the chances of negative consequences. Basically, before Texas rejected the Medicaid program, it should have considered the source of finance to carter for the uninsured individuals in Texas.

Consequently, Texas should reconsider its stand on the issue of the Obamacare since the federal government primarily funds the services provided under the act such as the Medicaid. Moreover, Texas being one of the states with high poverty rates, implementing Health Care Act would benefit the low-income earners who are unable to afford health insurance due to high premiums.

Proposed Policy Solutions: A Bipartisan Dilemma

The contentious issue facing the implementation of ACA in Texas and across many conservative states is finding the right balance between reducing taxes and regulations associated with the law and ensuring that underinsured and uninsured Americans have a lifeline when it comes to comprehensive health insurance coverage. While the Texan Republicans, mostly conservatives, believe that ACA takes away the right of individuals to make their own informed decision on the health insurance of their choice, the Democrat-led federal government holds that regulations are critical in protecting these vulnerable groups especially the poor whose numbers are significantly high in Texas.

The current impasse between the federal and Texan state government has attracted several proposals aimed at finding a solution. The solutions are aimed that Texas does not continue to rake up millions of dollars in federal debts as a result of failure to fully implement the ACA while hospitals especially in rural areas are not plunged into crisis due to lack of federal funding. One of the widely supported policy proposal is the utilization of waivers allowed under Section 1332 of the controversial law christened Obama Care. Section 1332 allows states to apply waivers known as State Innovation Waivers, which can be accumulated to give the states a larger financial base to help individuals purchase health insurance plans that meet their individuals needs (Gingrigh & Dashcle, 2016; Butler, 2015).

The waivers, which were to come into effect in 2017, allow states to aggregate all the healthcare waivers provided for under the ACA and other federal legislations. Renewable after every five years, the Section 1332 waivers affects Medicaid and Medicare among others. States can also be exempted from various provisions such as exchange subsidies and employers mandate, which are some of the controversial issues associated with ACA as they have been implicated in the rise of ACA-related taxes and premiums. States can also request for changes to these provisions with the view meeting the specific needs of their state (Butler, 2015). Essentially, Section 1332 allows for social, economic and political maneuver as the waivers can be channeled into policies and programs that promote health insurance affordability in a manner that is unique to Texas and other states that oppose the implementation of ACA.

Section 1332 waivers have already been used in Texas before following a deal with the federal government to offset the political impasse between the state and the federal governments, which crippled most of the healthcare services in the state (Garrett, 2016). The waivers have a special provision that demands the aggregated waivers must be used to secure comprehensive and affordable health insurance plans for individuals without discrimination based on a preexisting condition.

The second policy proposal is hinged on overhauling the whole ACA system by repealing and replacing it with a new healthcare plan that allows individuals to choose their own health insurance plan without the control or influence of the government. Proponents of the initiatives have proposed a wide range of measures towards ensuring that the exponential increase in premiums currently witnessed with ACA is curbed. The push for a repeal and replacement of Obama Care gained traction during the electioneering period and the swearing in of Donal J. Trump as the president. The proposed health care, which will also affect Texas’ healthcare system, will significantly increase the out-of-pocket expenditure of healthcare by individuals. This will lead to millions of low-income earners including Texans finding it increasingly difficult to afford health insurance (Saltzman & Eibner, 2016). The high amount of deductibles associated with ACA has also some individuals use alternative stand-alone health insurance policies such as indemnity plans or self-insurance (Thornton, 2017). While some of these are low cost, they can be relatively expensive and lacking in comprehensives.

Moving Forward: Best Option

The crisis that hit the health care sector in Texas as a result of the impasse between the federal and state government is indicative of the crucial role health insurance plays in the provision of quality health care services in the country. I n addition, ACA has beneficial provisions especially for the uninsured and underinsured. With a large population of individuals incapable of purchasing private insurance options such as indemnity plans and self-insurance due to poverty, Section 1332 waivers offer the best option. It has not only worked before following its coming to effect in 2017; but it has policy safeguards and maneuvering room that leaders in Texas can use to ensure that a greater number of residents are insured under a comprehensive health insurance plan. This policy proposal is preferable because it allows both conflicting parties on the different political divide to maintain their core principles in a win-win bipartisan agreement.

One of the strengths of the Section 1332 waivers is its negotiated nature. States such as Texas can enter into agreements with the federal government under the provision to waive the funds set aside for the provision of various health care services through negotiations. It is a popular and more acceptable compromise that many hard-line Republicans in Texas find appealing and acceptable to them. It allows the federal government to protect the core value of ACA: provision of comprehensive and affordable health insurance to the millions of uninsured and underinsured citizens who are low-income earners. This is the prequalification for a Section 1332 waiver. The state will be better placed to determine which policy suits the needs of the citizens after meeting the basic prequalification requirement. Aggregated resources can go a long way in ensuring that as many Texans as possible can access individualized health care insurance plans without being confined by the provisions of ACA.


Texas and the federal government have had several policy differences touching on various issues ranging from gun control to health insurance coverage. However, conflicts involving the latter have a greater implication due to the strategic importance of health insurance. The resulting impasse stems from the various ideological differences between the Republican-leaning leadership and residents and the federal government led by a Democratic. The Republicans are pushing for freer health insurance coverage where individuals can purchase their own insurance plans without government interferences. However, such a move would leave many Americans not only in Texas but nationally unable to purchase the much-needed insurance policy due to poverty. While many proposals have been put forward to solve the impasse including opting for self-insurance, Section 1332 waivers the most comprehensive and bipartisan solution to the issue. It offers a common ground where political ideologies merge for the benefit of the locals. Despite the challenge of rising cost of premiums, ACA still offers insurance plans that underprivileged Americans can afford. Its efficacy has been tested in Texas with excellent results. Therefore, it is a tried and tested policy that can help in bridging the ideological gap between Democrats and Republicans without negating the importance of ACA.




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Thornton, R. (2017 April). Fort Worth Texas Residents Purchase Alternative Health Insurance Plans. WPSD Local. Web.