Texas holds the dubious distinction of leading the nation in medically uninsured residents, by a lot. There are more Texans without health insurance than there are residents of Louisiana, the twenty-fifth most populous state. Getting by on a hodgepodge of free or low-cost (often inadequate) care, or piling up a mountain of debt they’re not likely ever going to be able to pay back, Texas’s 4.9 million uninsured residents—a staggering 16.6 percent of the population, more than twice the nationwide rate—live with this constant medical and financial vulnerability.
State legislators refuse to expand Medicaid eligibility, even though it would be federally funded thanks to the Affordable Care Act. Not doing so means nearly one million Texans today don’t have access to free health insurance that they could have at little or no additional cost to the state. Medicaid expansion remains the most straightforward, if politically infeasible, way to at least partially address the health insurance crisis in our state.
Instead, we continue to collectively pay in other ways for the care of the uninsured when they, for example, seek treatment at public safety net hospitals or turn up in emergency rooms that are required by law to stabilize their conditions. Most of these costs get passed on to other Texans via higher taxes, and some may result in higher health care bills for the privately insured.
Yet according to a report released last week by the nonprofit think tank Texas 2036, nearly a third of the state’s uninsured residents—some 1.4 million Texans—already qualify for premium-free health insurance. All they need to do is apply for coverage through the health insurance marketplace created by the ACA.
Charles Miller, a senior policy advisor at Texas 2036 and a former staffer for Governor Greg Abbott, was stunned after digging into the data and determining that 29.2 percent of uninsured Texans were likely already eligible for free health insurance. He says that’s a conservative estimate. “Let’s go!” Miller recalls thinking. “This is low-hanging fruit, y’all.”
When the ACA was enacted in 2010, it required all fifty states to expand Medicaid eligibility to nearly all adults earning up to 138 percent of the federal poverty level. But the U.S. Supreme Court subsequently ruled that states had to opt in to the expansion. Texas is one of ten that has declined to do so. Each state sets its own parameters for who qualifies for Medicaid, and Texas’s are especially limited. According to the Texas 2036 study, 15.3 percent of uninsured Texans—about 750,000 residents—fall into the coverage gap, meaning they don’t qualify for Medicaid or an ACA marketplace subsidy.
But a much higher percentage of uninsured Texans—47.6 percent—have household incomes of at least 100 percent (and no more than 400 percent) of the federal poverty level, and are thus eligible for subsidized plans via the health insurance marketplace. After the passage of 2022’s Inflation Reduction Act, more federal money was made available for marketplace subsidies, thereby increasing the percentage of uninsured residents eligible for premium-free plans to the 29.2 percent reported by Texas 2036.
“There is no simple answer,” according to Miller, for why so many Texans remain uninsured when they are eligible for subsidized plans. The Texas 2036 report argues that it’s not because those Texans don’t want health insurance. Just 11 percent of its uninsured survey respondents said being uninsured was a personal choice.
The think tank, which also supports Medicaid expansion, contends that this may be partly because the marketplace can be confusing to navigate. For instance, the subsidies for which an applicant qualifies are based on their projected yearly income, but if a person’s pay is sporadic or inconsistent, that can be difficult to predict accurately. Additionally, because there has been more funding available in recent years, those who applied for subsidies in the past and still found the marketplace plans too pricey may now qualify for free plans without knowing it.
Affordable Care Act policies were designed to make finding an insurance plan easier, according to Laura Dague, a health economist and associate professor at Texas A&M University. The findings of the Texas 2036 report are “really suggestive that there’s a lot of work that can be done,” she says, to ensure that uninsured Texans know they qualify for free plans and that they have the resources necessary to register on the marketplace.
It’s difficult to quantify exactly what this surplus of uninsured Texans means for the state’s economy and for our health care system. About half of the uninsured Texans in the Texas 2036 study do not have a usual source of medical care, meaning they’re often not receiving basic preventative care and may not be diagnosed with serious diseases in time to address them—or may rack up much higher treatment costs when conditions are finally diagnosed. And more than a third of them reported postponing mental health care for financial reasons.
While 46 percent of uninsured respondents who received health care over the previous two years said they did not pay for it, the providers of that care often have other means of recovering some of those costs—for example, through philanthropic funds or reimbursement by the government. And 36 percent of the uninsured respondents said they use emergency rooms for preventative care such as screenings, checkups, and vaccinations. Such avoidable ER visits add $32 billion in costs to the national health care system each year, according to an analysis by UnitedHealth Group.
The Texas 2036 report explores the possibility of having Texas take over the federally operated health care exchange website, as some other states have done, allowing for the options to be better tailored to local needs. That would require action by the state legislature. In the meantime, millions of Texans without health insurance can still apply for coverage through the HealthCare.gov website until the open enrollment deadline on January 16.
Nevertheless, according to Texas 2036’s figures, roughly 30 percent of uninsured Texans are left without options for affordable health insurance. Almost half of those are undocumented residents. The other half are those who fall into the coverage gap—earning too much to qualify for Medicaid but not enough to be subsidized on the marketplace. Dague emphasizes that this coverage gap “violates a lot of folks’ sense of fairness or equity.” Some people earning higher incomes may qualify for subsidized marketplace plans, while “these very low-income folks just don’t qualify for any help.”
Dague argues that experts and public officials don’t always do a great job of making the case for why health insurance is valuable. She points to a participant in the Texas 2036 study who compared receiving a health care bill to getting hit by a truck. “What’s the difference between being hit by a semi and an ordinary truck?” the respondent asked rhetorically. “You are dead either way.” Indeed, it doesn’t matter how big the bill is if you’re uninsured and don’t have the resources to pay it.
Still, while plenty of Texans face frustratingly high medical expenses, Dague explains that the value of insurance is that those who are covered are less likely to be blindsided by bills they can’t possibly afford to pay. “What insurance does,” she says, “is: the truck doesn’t hit you.”