Texas exemplifies the extremes of American health care. If you have good insurance, and you live in or near a big city, the state is among the best in the country in providing top-notch, cutting-edge medical treatments. But Texas also has more uninsured residents than any other state—both per capita (18 percent) and by sheer number (more than five million)—and that number will grow in the coming months as pandemic-era policies expire, with hundreds of thousands of Texans losing Medicaid coverage.
There’s a straightforward way to significantly reduce this number of uninsured Texans, with the federal government footing most of the bill, but the state’s Republican leaders have consistently refused it. When the Affordable Care Act became law in 2010, the bill’s authors sought to close the “coverage gap” by introducing a new marketplace for health insurance, for which Americans earning low incomes would be eligible to receive federal subsidies helping them pay for coverage. For those who even then couldn’t afford a marketplace plan, the bill would expand Medicaid—a joint state and federal insurance program.
In 2012 the Supreme Court struck down the ACA provision requiring states to expand their Medicaid programs. Instead states were allowed to opt in. Gradually legislators across the country determined the program was a good deal and enrolled. Today 40 states have committed to adopt Medicaid expansion. But not Texas.
Each state’s Medicaid program is different, and in Texas the parameters are especially narrow, restricting coverage to a limited group of low-income recipients, including residents who are pregnant, have disabilities, are children, or have a child on Medicaid. Expanding Medicaid would mean extending coverage to many low-income adults who don’t currently qualify. There was a major push to pass Medicaid expansion during the 2021 state legislative session, but the bill failed by a relatively narrow margin in the House of Representatives. Many similar bills were again introduced this year, but none appear on track to even be put to a vote. This is despite the fact that expansion would bring $5.4 billion in federal funding into the state’s economy and provide health insurance to about one million newly eligible Texans, according to a 2020 study by Texas A&M University researchers.
With more Texans insured, health outcomes would no doubt improve. Though it’s a complicated matter to quantify, several studies have found that Medicaid expansion was associated with more early-stage cancer diagnoses, and new Medicaid enrollees have self-reported being better able to manage conditions ranging from diabetes to mental health. A 2020 study found that Medicaid expansion was also associated with lower maternal mortality rates and “could be contributing to decreasing racial disparities in maternal mortality.”
And while hospitals throughout the state, and especially in rural communities, are struggling to stay afloat because of rising health-care costs, Medicaid expansion offers a lifeline. A 2022 study found that “Texas hospitals can benefit significantly from Medicaid expansion due to reductions in average treatment costs and the share of the uninsured.”
But even beyond its direct impact on health care, policy researchers have observed surprising spillover effects of Medicaid expansion, many of which derive from the economic stimulus related to reducing the financial burden on a state’s most vulnerable residents.
“When you’re worried less about paying medical bills, you can think about paying for other things,” says Carrie Fry, a health policy professor at Vanderbilt University. “You don’t have to make these really hard choices between paying for your insulin and putting food on the table for your family.” Here are some of the other potential benefits Texas may be giving up by continuing to decline to assist more Texans in affording health care.
Almost all of the academic papers on the topic show an overall reduction in crime, including violent crime, in the Medicaid expansion states compared to nonexpansion states. The drops range from roughly 3 percent to 6 percent. As possible explanations for why this occurs, researchers point to both the greater access to mental health resources and the reduced financial burdens associated with health insurance coverage in the expansion states.
In one study, Fry and colleagues at Harvard University compared the jail records from six counties in the U.S.—three in expansion states and three in states that hadn’t expanded Medicaid. They saw decreased rates of recidivism in two of the three expansion counties. In contrasting El Paso County, in Texas (a nonexpansion state), with Pima County, in Arizona (an expansion state), for instance, they found “a thirteen percent decline in the probability that someone is rearrested after Medicaid expansion in Arizona, relative to Texas,” Fry says. She and her colleagues traveled to these counties to interview jail employees and behavioral-health workers to try to identify any substantial differences in services offered in each county. “The only thing we could tell that was truly different between Pima and El Paso was financial access to care.”
As Texas’s population growth continues to outpace much of the rest of the nation, more and more residents are being pushed into precarious living arrangements as the cost of housing skyrockets. Research shows that Medicaid expansion is consistently associated with more stable housing for low-income residents. One study determined that for every thousand new enrollees in California, Medicaid expansion was associated with 22 fewer evictions per year. Relatedly, a 2021 study found that as uninsured rates dropped in expansion states, a greater portion of low-income residents purchased homes, even as housing prices increased.
Roughly one in seven Texas households experiences food insecurity, meaning they don’t have adequate access to the nutritious food required to meet their basic needs. The state ranks forty-fifth in the country in that metric, with a food insecurity rate of 13.7 percent, well above the national average of 10.4 percent. With more of their medical expenses covered, studies show, residents in expansion states are better able to access enough food for a nutritious diet, leading to better health outcomes. A 2019 study that examined data from some of the earliest states to adopt Medicaid expansion found a 12.5 percent relative reduction in very low food security compared to nonexpansion states. Likewise, a 2020 study found that a state’s adoption of Medicaid expansion reduced the likelihood of a low-income household in that state being food insecure by 6.5 percentage points.
States that have expanded Medicaid have seen declines in the shares of residents filing for Supplemental Security Income, the federal program that provides monthly payments to seniors and recipients with disabilities who cannot work. That suggests that those who previously applied for disability income may have been doing so largely to pay for medical expenses. With those costs covered by Medicaid expansion, more Americans may be able to bypass disability income and reenter the workforce. Indeed, though many close observers expected labor force participation to drop in states that expanded Medicaid, Fry says there’s no conclusive evidence that expansion resulted in that. In fact, one 2016 study found positive labor market outcomes for some demographics in expansion states compared to nonexpansion states. Fry also points to surveys in which majorities of those receiving Medicaid in Ohio and Michigan reported that the new coverage improved their job performance and their ability to seek employment. Additionally, another study from Michigan showed that several years after the state expanded Medicaid, enrollees were more likely to be employed or in school.
Fighting the Opioid Crisis
While certainly not a panacea for the complicated and deeply rooted opioid crisis, Medicaid expansion could be one more tool in limiting drug overdose deaths. A 2020 study of data from 3,109 counties nationwide found a 6 percent lower rate of opioid deaths in expansion states compared to nonexpansion states. According to the study’s authors, “the findings suggest that expanding eligibility for Medicaid may help to mitigate the opioid overdose epidemic.” In her own research, Fry has found a shift from patients with opioid use disorders paying for their own treatment to a greater number of instances of Medicaid footing the bill, which frees up money for patients to spend on other basic needs.
Cash for Local Governments
Funding safety net public clinics and hospitals that provide comprehensive care to uninsured patients requires money that usually comes from county property taxes. “Counties actually spend quite a bit of money on this,” says Laura Dague, an economist and professor at Texas A&M. In fact, in some years certain large urban counties have spent as much on indigent health-care costs as on all other county functions combined, according to a 2019 report from the Texas Alliance for Health Care. In fiscal year 2021, Harris County spent $720 million on charity care. When that money comes instead from Medicaid, it frees up local government budgets, allowing officials to spend the money on other programs, such as parks, roads, and public safety.
Dague has no interest in wading into the controversial political arguments over Medicaid expansion, but she says the numbers are clear. “Certainly, if you look at the evidence, it looks like a pretty good deal.”