Health In the Lone Star State

Commentary by John C Goodman

A left-leaning federal judge in Texas ruled recently that the Medicaid system in the state was not to his liking, and ordered changes. This isn't too surprising, as activist judges in Texas have a history of attempting to take over everything from prisons to schools.

At the heart of Judge William Wayne Justice's decision is his belief that Texas is not doing enough to encourage children enrolled in Medicaid to seek preventive care. Ever alert to facile political point-scoring, the Gore campaign is now running a television ad suggesting that the Texas situation is worse than other states, and that Governor George W. Bush is to blame.

The real facts, however, ought to have proved inconvenient to the Democrats. Here they are: The original lawsuit was filed against a Democratic governor; there has been substantial improvement, on Gov. Bush's watch, since the suit; and Texas is doing better than most other states.

In particular, Texas is spending more than any other state on outreach programs to encourage preventive care. According to the state's Attorney General, Texas has the highest participation rate for children in these preventive care programs in the country. Child dental care under Medicaid is almost double the national average.

The television ad is only the latest in Al Gore's attempt to portray Texas as a Third World nation where people die in the streets because they lack health insurance. The image is not even remotely accurate.

According to the U.S. Census Bureau, 4.8 million of the 19.6 million Texas residents - about one in every four - lack health insurance. Yet contrary to the perception, the uninsured sector in Texas is not going without health care. And the reason they lack insurance is not necessarily because of low income or insurance unavailability. Rather, it is the result of unwise government policies, which encourage people to be uninsured. Although both state and federal policies contribute to the problem, the federal government probably bears the bulk of the blame.

One reason why there are so many uninsured Texans is that, for most of the time, the absence of insurance is not a barrier to medical care. There are more than 40 federal programs which fund health services for the uninsured in the state. The largest single program - spending more than $1.5 billion dollars a year - is the "disproportionate share hospital" payment program, designed to compensate hospitals that serve an above average number of indigent patients. There are also health care grants for residents of public housing, seasonal farm workers, legal immigrants and even undocumented immigrants.

Furthermore, Texas law requires counties to have programs to serve the medically indigent. They usually fulfill this requirement by forming hospital districts, which have taxing authority. Texas also requires non-profit hospitals to provide indigent care equal to 5% of their revenue. State and local governments, charities and nonprofit providers also run numerous other health care programs.

According to a recent report by the state Comptroller, public and private organizations spend approximately $1,000 per uninsured individual per year on charity care outside the Medicaid program. Almost half of this money goes toward hospital care for the uninsured, while one-quarter is free care, provided by physicians. Additional money is spent on other health programs such as mental health, community care, local health agencies, county indigent care and long-term care. The cumulative effect is that although technically "uninsured," Texans without health insurance receive almost two-thirds as much health care as is spent on Medicaid recipients each year.

According to one estimate, 1.6 million Texans qualify, but are not enrolled in, Medicaid and CHIP. While the number may sound high when taken out of context, the state's enrollment efforts are made difficult because large numbers of potentially eligible people have decided that the benefit of enrolling in Medicaid and CHIP is not worth the bureaucratic hassle. The reason: in all major Texas cities, Medicaid patients and the uninsured enter the same emergency rooms, see the same doctors and are admitted to the same hospital rooms. Those who have signed up for government insurance do not get more, faster or better care.

Federal policies affect the uninsured in Texas in several other important ways. Although federal tax subsidies for employer-provided insurance total about $125 billion per year, most of the uninsured get no tax relief when they purchase insurance on their own. And although much of the free care for the indigent is subsidized through federal programs, the money cannot, in most cases, be used to purchase private insurance instead.

The federal government, however, is not solely to blame. Texas has approximately 43 health insurance mandates - the fourth highest number of any state in the nation. Under these laws, insurers are required to cover everything from drug and alcohol abuse to in vitro fertilization. And with every mandated benefit, the cost of insurance rises - making it less attractive.

As with any other issue in an election year, it is important to look at the whole story. The availability of free health care is a major reason why 24% of Texans do not have insurance. This is especially true of healthy young adults, many of whom prefer to spend their disposable incomes on other things, knowing they can get health care if they need it. State and federal policies could reduce the number of uninsured, however, if they subsidized private insurance as generously as they subsidize free care to the uninsured.

This, in sum, is the truth about health care in Texas. Somehow, it got left out of those Gore campaign ads.