Road Trip

Texas: A Health Insurance Two-Step

The ACA made a dent, but Texas continues to lead the country in the percentage of people without insurance. Now it has also grabbed the top spot in high-deductible insurance.

Charlotte Huff
% in the individual market: 7%
% uninsured: 17%
Per capita health expenditures (rank): $5,924 (46)
Rankings include the District of Columbia
Source for all data: Kaiser Family Foundation

As other states have expanded Medicaid coverage and promoted ACA-related exchange options, the Republican-led legislature in Texas pursued a more minimalist approach.

As a result, the Lone Star State continues to lead the country in the percentage of its residents without health insurance, although a dent has been made. As of 2015, 17% of Texans were uninsured, compared with 22% two years before, according to the most recent census bureau data.

Some of the newly insured are getting coverage through Medicaid. Enrollment has increased by 7% in Texas, and 30% nationally, compared with pre-ACA levels, according to Kaiser Family Foundation data. Even though state legislators balked at expanding Medicaid, some Texans discovered that they already qualified when enrollment drives and ACA-related publicity enticed them into looking into coverage, says Tom Banning, CEO of the Texas Academy of Family Physicians.

Meanwhile, those residents relying on ACA exchange plans have been sorting through increasingly slim pickings. By the 2017 enrollment period, only 10 insurers participated compared with 16 in 2016, according to an analysis published in February by the Brookings Institution and the Rockefeller Institute. Of the 10, six offered policies in 11 or fewer of the state’s 254 counties, and no PPO policies were available.

Along with strict limits on financial eligibility for Medicaid, the uninsured rate in Texas can be tied to several other factors, including a relatively high number of undocumented residents and a lower rate of job-provided insurance compared with many other states, according to the Texas Medical Association. With so many uninsured, there was pent-up demand for medical care, the extent of which caught insurers off guard, says Michael Morrisey, a health economist at Texas A&M University and a coauthor on the Brookings and Rockefeller analysis.

When more reliable usage data rolled in last year, insurers realized that “they got the pricing wrong,” Morrisey says. “People were much higher utilizers of [medical] services then they had anticipated.”

There have been a few health insurance-related silver linings in recent years. Texas continues to attract large employers, particularly in growing regions such as suburban Dallas, Banning notes. Toyota and JPMorgan Chase are among those who have recently expanded their Dallas footprint, with jobs and health benefits attached.

Still, the proliferation of high-deductible health plans—both through employers and on the individual market—has created its own set of challenges, Banning says. More Texans are enrolled in the plans—1.7 million as of 2016—than in any other state, according to a survey by America’s Health Insurance Plans, which studied plans paired with health savings accounts.

Sometimes physician practices may not know how much of the deductible a patient has met until they submit the bill, and then have to chase down payment after the fact, Banning says. “We’ve seen accounts receivables increase and bad debt write-offs increase as a result of not being able to collect those dollars.”

As for participation in the ACA exchanges, insurers may stall on reaching a decision for 2018 until late summer, if last year’s pattern is any guide, says Morrisey, who heads up the health policy and management department at Texas A&M. All eyes will be trained on Blue Cross and Blue Shield, which now offers coverage in all 254 counties, he says.

If the Medicaid caps proposed in the House legislation to repeal and replace the ACA do become law, the resulting cuts could reverberate throughout the state’s health system, according to an analysis published this spring by Avalere. It projected that Texas could lose $5.1 billion in funding for children covered by Medicaid from 2020 to 2026, more than any other state.

Charlotte Huff is a freelance health and business journalist in Fort Worth, Texas.


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