Obamacare is helping Texas, no thanks to Rick Perry and Ted Cruz

In spite of GOP opposition, Texas has benefited from Obamacare and stands to lose a lot if the law is crippled

Published May 1, 2015 5:15PM (EDT)

Ted Cruz, Rick Perry                    (Jeff Malet, maletphoto.com/AP/Jacquelyn Martin/photo montage by Salon)
Ted Cruz, Rick Perry (Jeff Malet, maletphoto.com/AP/Jacquelyn Martin/photo montage by Salon)

There aren’t many places in the country with stronger political opposition to Obamacare than Texas. Former governor (and presumed presidential candidate) Rick Perry described the implementation of the Obamacare as a “criminal act” that the country should not accept. The current governor, Greg Abbott, has sued the Obama administration over the Affordable Care Act and is showing no signs of warming up to the law anytime soon. Sen. Ted Cruz made a name for himself with a 21-hour fake “filibuster” in opposition to Obamacare and is currently running for president on the promise to repeal every single word of it. After the law was passed, Texas joined several other Republican-dominated states in refusing to expand Medicaid and refusing to set up its own state-based health insurance exchange. Texas clearly has it in for Obamacare.

And that’s too bad because, even with all that determined political opposition, Obamacare is actually doing some good things in the Lone Star state. Prior to the ACA’s implementation, Texas had the highest uninsured rate in the nation, the most uninsured children in the nation, and the highest uninsured rate among poor residents in the nation. According to a new study from Rice University, the uninsured rate in Texas has dropped by a significant margin, and Obamacare is the reason why.

In September 2013, Texas’ overall uninsured rate was 24.6 percent. In the 18 months that followed, the rate dropped to 16.9 percent. That’s still the highest rate for any state in the country, but a significant improvement nonetheless. “We find that the ACA has had a substantial positive impact on the rate of health insurance coverage among Texans,” the study notes. “The drop is almost entirely attributable to newly insured individuals who purchased their own plans. The reduction in the rate of uninsured individuals occurred across all age groups, including younger adults.”

But, of course, the news is not as good as it could be. While the overall uninsured rate is going down in spite of the state’s political resistance to the ACA, the opposition is still taking its toll. “The percent of uninsured Texans with incomes above 138% of the federal poverty level dropped by 44.5% while those with the lowest income only dropped by 19.7%,” per the Rice study. “As of March 2015, the lowest income Texans are almost four times more likely to be uninsured than higher income individuals.”

This is what happens when a state refuses to expand Medicaid under the ACA – people who qualify for subsidies can still purchase insurance on the federal exchange, but people who don’t make enough to qualify for those subsidies get nothing. This is the so-called Medicaid coverage gap, and Texas’ is the largest in the country, with close to 950,000 people affected. So while the law may be helping overall, Texas’ political leaders have ensured that the people who need the help the most are the least likely to get it.

And, of course, it’s the position of Texas’ Republican leaders that the Obamacare subsidies that have powered this reduction in Texas’ uninsured rate should be taken away. They support the plaintiffs in King v. Burwell, who argue that the Affordable Care Act’s health insurance subsidies should not be available to states, like Texas, that refused to set up their own health insurance exchanges. If the Supreme Court rules for the plaintiffs next month, Texas will take a huge hit. “Eighty-six percent of Texans who purchased insurance on the federal exchange received a tax credit,” the Texas Tribune reported in February. “The average subsidy was $242 per month, or about a 72 percent reduction to their health insurance premium.” Absent those subsidies, many will just choose to drop their coverage. Gov. Greg Abbott hasn’t said whether he’ll let Texas set up its own exchange and keep the subsidies flowing.

So it very well may be that all the good work done by Obamacare against the wishes of Texas Republicans will soon be undone and the state will go back to having a sky-high uninsured rate. If you ask Rick Perry, though, he’ll tell you that the “large number of uninsured” Texas had pre-Obamacare is “what Texans wanted.” That’s a dubious allegation – 83 percent of state residents think having health insurance is important, per a recent survey – but that could be exactly what Texas gets if the people running the state have their way.

By Simon Maloy

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