A Tale of Two States: California and Texas will show how well ACA works
As the right grumbles and gossips about Chief Justice John Roberts’ majority opinion upholding the Patient Protection and Affordable Care Act (ACA) and the left largely celebrates and ponders it, the response of our two most populous states—California and Texas—will ultimately test the effectiveness of the country’s grand experiment in health reform.
With over 7 million uninsured residents, California is taking advantage of every incentive provided under the ACA to increase access to health insurance—expanding Medicaid to 400,000 childless adults even before the 2014 requirements and full funding take effect, aggressively building a state health exchange and developing a public awareness campaign to drive up enrollment.
Texas, with nearly a quarter of its 25.6 million people living without health insurance, is using all of the flexibility provided by the Act, and the Court’s interpretation of it, to keep coverage at the status quo. The Lone Star State is refusing to accept federal funds to expand Medicaid and refusing to build a state health exchange to provide residents an easy-to-access marketplace to buy private insurance – which is offered, by the way, with federal subsidies for those making under 400 percent of the poverty line, $76,360 for a family of three.
On its face, you might attribute these decisions to pure red state/blue state politics. And you might be right. Texas Governor Rick Perry’s letter to the Obama Administration, rejecting the Medicaid expansion and state health insurance exchange, was filled with enough swagger to make the Tea Party swoon. He opposed the two provisions as “brazen intrusions into the sovereignty of our state,” and he thanked “God and our nation’s founders” for the right to “reject the PPACA power grab.” He insisted that neither provision “under the Orwellian-named PPACA would result in better ‘patient protection’ or in more ‘affordable care.’ ”
Rhetoric aside, it’s clear that Governor Perry and Governor Jerry Brown of California have deep-seated differences in how they view the role of government and its ability to spur economic growth.
Both states are responding to the Court’s decision amid serious state budget woes. California is expecting a shortfall of $15 billion in the next fiscal year, and Texas faces a $9 billion deficit. The question for both governors is not only whether it is the responsibility of government to help improve the health and well-being of their most needy citizens, but how such a decision impacts the ability of the state to assist citizens in other ways.
Governor Brown was silent on the budgetary impacts, simply applauding the Court’s opinion. But just days before, he signed a budget with $1 billion in cuts to the state’s Medicaid program, Medi-Cal. Governor Perry suggested that implementing the ACA could “threaten even Texas with financial ruin.”
So who is right? Will the ACA improve the health of Californians and aid in its economic recovery, or will it lead to “financial ruin”?
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