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Public Statements

CBC Hour: Eliminating Health Disparities

Floor Speech

By:
Date:
Location: Washington, DC

BREAK IN TRANSCRIPT

Ms. JACKSON LEE. I thank the conveners of this Special Order and express my appreciation to Mr. Horsford and to Mr. Jeffries for continuing to educate our colleagues on extremely important issues. And I'm delighted to join the Congressional Black Caucus as it proceeds continuously to ensure that we advocate for those who cannot speak for themselves.

I want to take up an issue that has struck home and is being confronted by many States, some of which are in the South and some are in other places throughout the Nation. I was very pleased to stand with my fellow Democrats and support the Affordable Care Act. I could go through the journey of 2009 and 2010, when many of us spread out across the country and confronted misinformation through town hall meetings, controversy, and conflictedness.

I think that what should be continuously emphasized as the President's leadership on one single point: that although health care was not listed, per se, in the Constitution, it should be a constitutional right. If you read the words or quote the words of the Declaration of Independence, we hold these truths to be self-evident, that we have certain unalienable rights of life, liberty, and the pursuit of happiness, one might argue that education and health care fall into those provisions of life, liberty, and the pursuit of happiness.

It was in the context of that framework in the original words of the Constitution that, as you open the book that has the provisions of the Constitution, the opening phraseology indicates that we have come together to create a more perfect Union. I think the Affordable Care Act was intended to try and lift the boats of all people.

Interestingly enough, major hospitals across America were clamoring for the passage of this legislation to really do what we're speaking about, which is to cut into the health disparities, because our hospitals across America were suffering from not being reimbursed on uncompensated care for those people who came without insurance. Many of them included African Americans, who suffered in larger numbers from the difficulties with diabetes, for example.

Texas, which is now in the eye of the storm, is one of those States that has rejected the expansion of Medicaid, which goes to the very point of increasing opportunities for those who suffer disparities so they can have access to health care. That is largely the problem in Texas. Federal funding for the adult expansion far exceeds current local expenses for unreimbursed health care costs, having 3 years without any match whatsoever and then having the ability to have a very small match later on.

It is estimated that Medicaid expansion would generate more than 231,000 jobs in 2016, a 1.8 percentage point reduction in the State's current unemployment from 6.1 percent to 4.3 percent, and it would directly address the disparities in diabetes, heart disease, and HIV/AIDS, in partnership with our federally qualified health clinics, which many States have seen expanded because of the Affordable Care Act. And now in my home State, my city in particular, Central Care has now put more community health clinics in areas where disparities were severe and lives were being lost.

It benefits children as well. I'd like to cite some numbers here for my colleagues to indicate what we would benefit from by the expansion of Medicare.

Unreimbursed health care costs for charity care in 2010, for an estimated $4.4 billion in unreimbursed expenses. We would be covering that.

We would also get off the number one list. Texas, number one, ranking among States with the greatest share of uninsured residents at 23.8 percent in 2011, more than 6 million people, compared with the national average of 15.7 percent.

And then, as I indicated, we would, again, eliminate the opportunity for low-income adults to be able to secure care. When low-income adults don't get care, the children don't get care.

So I am suggesting that the rejection by Governor Perry, along with other Governors, to not accept expanded Medicaid has a direct impact on the increase, not only of the uninsured, but the increase in the numbers of those suffering from certain diseases who cannot get care and, therefore, rather than have preventative care, which an expansion of Medicaid would provide, allowing for doctor visits, then the only time that we are able to secure health care for them is when they arrive in the cities and the counties and the States' emergency rooms, where we see a surge in emergency room costs, health care costs, and we eliminate the good will and the good intentions of a very good bill that answers the question, are we attempting to form a more perfect union by establishing a framework of insurance for all Americans, hardworking Americans, Americans of Asian descent and African descent and Hispanic descent, who have different DNA and cultural indices that would lead them to have certain diseases more than others.

Let me also take note of the fact that one of those particular diseases that impacts the African American woman in a more devastating manner than in others, and that is triple negative breast cancer that impacts Hispanic women, African American women and Anglo women, but more so in the African American community. That kind of diagnosis gives in this current phrase of time a short and almost devastating diagnosis, one that is difficult to recover from, one that sees an increase in the loss of life.

So I would make the argument to Governor Perry and to Governors across the Nation who have rejected the expanded Medicaid as a budget issue, as a political issue, as a "I'm going to stand up to the President'' issue, you are wrong, you are absolutely wrong, because this is not a political issue; this is a life and death question. And I want to applaud Governors like those in Florida, who certainly, obviously, may not welcome the applause. But I think it's important when people stand on principle or what is good for others, that they should be applauded.

So I applaud the Governor of Ohio and the Governor of Florida for moving forward on Medicaid expansion. And I would say to my good friend, who is leading this very important Special Order, that we need to begin to work with the President to find ways to substitute the rejection of the Medicaid expansion so that individuals that are in these States who cannot speak for themselves, who in actuality have a head of State Governor that is making a political decision, a simple political decision, will not lose out on the benefits intended by the Affordable Care Act, which is to give comfort and to give help and aid to those who need health care.

I finish on this note. I want to thank Dr. Christensen, because when we began to write this legislation with the Congressional Black Caucus that, one, talked about the health care disparity, which was the premise of the fact of expanding health care, it would be a shame if after all this work and passage of this bill there would be innocent persons in our respective States like Texas that could not benefit from something that could save lives.

I thank the gentleman for yielding.

Why Texas Should Extend Medicaid Coverage to Low-Income Adults

LOCAL BENEFITS

Local savings from the expansion would offset much if not all of the state match in 2016 and 2017. According to reports that cities, counties, hospital districts and local hospitals submit to the state, unreimbursed local health care spending in Texas that local property taxes largely support, totaled $2.5 billion in 2011. In addition, Texas hospitals reported at least $1.8 billion in conservatively estimated unreimbursed health care costs for charity care in 2010, for an estimated total of $4.4 billion in unreimbursed expenses

The math is simple--federal funding for the adult expansion far exceeds current local expenses for unreimbursed health care costs. Although the impact of the Medicaid expansion and ACA subsidized insurance would not entirely offset total local expenses, since not everyone currently receiving charity care, such as undocumented immigrants, would be eligible for these programs and since some services may not be covered, much of it would.

If necessary, the state could use some portion of these savings to fund the required match through an intergovernmental transfer arrangement. Local governments and hospitals would still realize a net gain over current costs from the federal funds the match would generate.

It is estimated that the Medicaid expansion would generate more than 231,000 jobs in 2016, equivalent to a 1.8 percentage point reduction in the state's current unemployment rate--from 6.1 percent to 4.3 percent.

STATE BENEFITS

In numerous programs, the state pays 100 percent for adult health care that Medicaid would cover under an expansion. For example, the Texas Department of Criminal Justice requested $186.5 million in state appropriations for hospital inpatient and clinical care for its inmates for 2014.

The federal federal government contributes nothing toward this purpose now, but with a Medicaid expansion, the state would spend nothing on in-patient hospital care for eligible inmates from 2014 through 2016, and a maximum of just 10 percent of these costs by 2020. Similarly, the expansion would cover eligible adults in state mental institutions and juvenile facilities that need non-psychiatric hospital in-patient care.

The state also spends unmatched general revenue for community primary care services, mental and behavioral health services and, soon, women's health care delivered to low-income individuals who are not eligible for Medicaid. Other programs include the breast and cervical cancer program, the kidney health care program and the HIV Medication assistance and STD program. Furthermore, the state supplements funding for the County Indigent Health Care (CIHC) program, much of which would be unnecessary under a Medicaid expansion. The state also pays the regular state match for medically needy adults that currently qualify for Medicaid. Under an expansion, the state would be able to use the high federal match rate for newly eligible individuals not covered by Medicare.

The Comptroller's office estimates that larger caseloads from a Medicaid expansion would net increased revenues from the insurance premium tax due to the large number of persons who will buy health insurance under the exchange, as well as those covered in the expansion. The Comptroller estimates the increased insurance premium tax revenue due to ACA implementation and the Medicaid expansion at $1.3 billion from 2015 through 2019, or an average of $250 million a year.

In addition to these savings and new revenue that could offset the required state match, the expansion would generate an additional $1.8 billion in new tax revenue from 2014 through 2017, assuming moderate enrollment--enough to offset nearly half of the required state match from 2014 through 2017. These jobs, many of them in health care, would provide substantial benefits and increased economic security to families and local communities. As employees spend their wages on taxable items, state and local governments benefit from increased tax collections, and the increased economic activity in turn creates other jobs.

BENEFITS TO CHILDREN

According to the Census Bureau, in 2011 Texas had about 900,000 or 16.7 percent of the nation's 5 million uninsured children, and nearly 600,000 of the nation's 3.5 million uninsured children with family incomes below 200 percent FPL, again a 16.7 percent share. About 13.2 percent of all Texas children are uninsured, compared to a national average of 7.5 percent.

Bringing Texas up to the national average would require the state to insure an additional 393,000 children, less than the 550,000 expected to enroll in Medicaid under a Moderate scenario. After 2014, the national average will increase significantly since most states will expand Medicaid, which means that, without the expansion, the disparity between Texas and other states will grow.

Studies conducted in the 1980s found that expanding Medicaid to children reduced child mortality by 5.1 percent and infant mortality by 8.5 percent. Assuming the lower 5.1 percent rate, the expansion would save the lives of 2,700 Texas children every year after full implementation.

BENEFITS TO ADULTS

Our children also need healthy parents to provide for their care. Many low-income individuals and families simply cannot afford basic living expenses, health insurance and out-of-pocket health care expenses, making a Medicaid expansion imperative.

The Kaiser Family Foundation estimates that about 41 percent of adults covered under the expansion would be parents. Many of them work, but lack health insurance. According to the Census Bureau, 59.9 percent of uninsured adults in Texas work, a higher labor force participation rate than the total population's. According to Kaiser, about 1.2 million adults who would be covered under the expansion in Texas are working, about 60 percent of them in agriculture or service industries that tend toward smaller firms and are less likely to offer insurance to employees.

Only 28.4 percent of the 320,334 Texas private firms with fewer than 50 employees insured their employees in 2011, versus 92.3 percent of the 132,109 larger private firms. And besides working for low wages in firms that do not offer health insurance, many low-income individuals find work only on a part-time or seasonal basis, resulting in poverty-level incomes.

The Medicaid expansion would cover a person employed in a full-time, minimum-wage job paying $7.25 per hour, which equates to $15,080 per year, just below the 138 percent FPL cutoff. It also would cover a single parent earning $10 per hour (annual wages of $20,800). These wages are generally insufficient to cover basic living and working expenses as well as health insurance.

The high cost of health insurance affects both employers and workers, but high premiums as well as out-of-pocket medical expenses make it impossible for most low-income workers to afford health care. The 2012 average cost of single coverage was $5,615, and family coverage was $15,745, a 30 percent increase since 2007, according to a recent study by the Kaiser Family Foundation and the Health Research and Educational Trust. Employees paid an average of $951 for single coverage and $4,316 for and $11,429 for family coverage per employee, it is unsurprising that most small employers find it difficult to provide insurance.

Although the ACA provides subsidized health insurance for individuals above 100 percent of FPL, about 1.4 million uninsured Texas adults aged 18 to 64 who are below 100 percent of FPL will not be eligible. Covering most of these adults through Medicaid would mean a healthier workforce and would reduce absenteeism, job loss and unemployment insurance costs to employers. It also would increase income for families with children, thus reducing stress and providing more opportunities.

And, it would save lives. The Harvard School of Public Health recently compared three states (New York, Arizona and Maine) that expanded Medicaid to childless adults aged 20 to 64 between 2000 and 2005 with neighboring states that did not (New Hampshire, Pennsylvania, Nevada and New Mexico). They found not only a higher insured rate in the expansion states, but a 6.1 percent drop in the death rate for adults under age 65, or about 2,840 deaths prevented each year for every 500,000 persons newly insured. This translates into one life saved per year in the five-year follow-up period for every 176 newly insured. In Texas, that would amount to about 5,700 lives saved per year under the Moderate enrollment scenario once fully implemented.

BENEFITS TO EMPLOYERS

Only 36 percent of U.S. workers in firms with fewer than 25 workers have insurance.36 In a Kaiser Family Foundation survey, 48 percent of small employers indicated that the cost of insurance was too high for them to offer it to employees.

On the other hand, when their uninsured employees become sick, they are more likely to be absent from work longer, creating a burden to their employer and fellow employees. Frequent or prolonged absences for common untreated conditions such as asthma, diabetes, heart disease, allergies and flu can lead to terminations and the costs of recruiting, hiring and training new employees. Expanding Medicaid to adults aged 18 through 64 who are making marginal wages or working in part-time or seasonal positions is an effective way to assist small businesses and their employees alike.

Finally, we estimate that the Medicaid expansion would generate nearly 71,500 jobs in Texas in 2014, rising to 231,100 jobs in 2016, the first year of full implementation. Many of these jobs would be in health care, an industry that pays well and provides good job security and benefits, including health insurance, and wages would average $50,818 during the 2014-2017 period--the same as the statewide average for all industries.

Texas already has the highest rate of uninsured for adults aged 18 to 64 of any state--31 percent compared to a national average of 21 percent in 2011.45 If Texas does not expand Medicaid, and Wal-Mart and other companies implement their intended policies, the number of uninsured in Texas will grow as it shrinks in states that acted, leaving Texas still at the bottom and digging a deeper hole.

FINDINGS IN OTHER STATES

Recent studies in other states have also found that states can finance their share of the expansion using funds already spent on state and locally funded health care for adults and new revenues generated from the expansion. After further study and considering revised trends, several states besides Texas have also substantially reduced their estimates of the state funds required for the expansion.

Some governors that previously expressed opposition to the expansion have changed their minds. In particular, Arizona's governor, Jan Brewer, initially in opposition, has recently announced that she will support it as long as Arizona includes an automatic trigger reducing Medicaid optional coverage should the federal government reduce its match rate in the future, a concern expressed by several state governors.46 After reviewing a new study that identified sufficient existing revenue sources, New Mexico's governor, Susana Martinez, also announced her support for the expansion.

California. A recent study by the University of California at Berkeley and the University of California at Los Angeles on the California expansion found that increased state tax revenues and savings would largely offset additional spending. It also found that savings in other areas of the budget, including other state health programs, mental health services and state prisons due to the expansion ``would likely be more than enough to offset the $46 to $381 million in annual state General Fund spending for the newly eligible population through 2019.''

Florida. Florida has recently reduced its estimate of state costs from $26 billion to $5.066 billion over 10 years from 2013-14 to 2022-23, including costs for newly eligible adults ($1.767 billion), children who are currently eligible but not enrolled ($3.012 billion) and the cost of shifting, called "crowd out,'' of currently insured individuals to Medicaid ($0.287 billion). The state now estimates that the expansion would generate $37 billion in federal funds over the ten-year period, of which about $30 billion is for newly eligible adults.

Ohio. Estimates just published by Ohio State University compare the state's match requirements with the net savings the state would receive from moving adults from state-funded programs to Medicaid over a nine-year period from 2014 through 2019, concluding that savings in these programs would provide 41.2 percent of the state match necessary for the expansion. The study estimated that the state would receive net savings of about $1 billion on:

Better match rate for medically needy adults of $709 million.

Breast and Cervical Cancer Program costs of $48 million.

Inpatient prison health care costs of $273 million.

In addition, the study pointed out that there would also be savings on non-Medicaid substance abuse treatment, family planning, pregnant women and other state health care programs for uninsured adults. The study identified other areas of savings as well, including reduced criminal justice costs due to better access to substance abuse treatment.

The study also found net increases in state revenue from taxes of $2,898 million on: managed care plans ($1.823 billion), general revenue ($857 million) from increased economic activity and increased drug rebates to the state from pharmaceutical companies ($218 million). The study estimates that the state will need about $2.5 billion for state match, which would leave a net state fiscal gain of $1.4 billion.

Wyoming. The Wyoming Department of Health issued a report in November 2012 that also looked for offsets to pay for the Medicaid expansion. The department found that "participating in the optional expansion of the Medicaid program would result in a projected cost savings for the State General Fund throughout the first 6 years of the ACA implementation (fiscal years 2014-2020).''

OBJECTIONS TO MEDICAID EXPANSION

The ACA and the Medicaid expansion have raised concerns in Texas and some other states about its long-term costs for state and local budgets, as well as other concerns. Objections to expansion in Texas primarily revolve around three arguments:

Medicaid is "socialized medicine'' like that practiced in western Europe and expanding it would spread it further;

The federal government should abandon Medicaid and move to a system of block grants to states, to provide them with more ``flexibility'' in meeting their citizens' health care needs; and

The added cost burden of expansion, despite extremely favorable federal matching rates, is too much for a program that has already overburdened the state financially.

Socialized medicine: Medicaid is not socialized medicine. Socialized medicine as practiced in Western Europe, and specifically Great Britain, is a system under which the government not only funds but also operates hospitals, hires health care providers and controls every aspect of health care. Medicaid does not do these things; patients and their health care providers make health care decisions. Medicaid in no way meets the definition of "socialized medicine.''

Medicaid is a federal insurance program that matches state funding to provide health care to eligible, low-income citizens who cannot afford private health insurance. States receive federal matching funds and administer the program under federal rules that limit eligibility to certain groups and services and that provide states with flexibility within certain eligibility and service requirements. Texas participates in many similar federal programs that require state matching funds, including transportation, historic preservation and homeland security programs, among others.

Block grants: Some Texas lawmakers suggest that Medicaid is a "one-size-fits-all'' program that fails to meet the state's unique demographic and industry needs. They are petitioning the federal government to convert federal Medicaid funding to a block grant, with each state receiving a fixed amount to establish its own state-specific program that might or might not include all the features of the current program. Even for lawmakers who favor a block-grant approach, however, this argument should not affect the decision to extend Medicaid coverage under the ACA. In fact, lawmakers who favor a Medicaid block grant in particular should support extending Medicaid to low-income adults: the government typically bases block grants on historical funding levels, so maximizing federal funding now would better position Texas in the event of any future conversion to block grants.

Cost burdens: As noted above, state and local governments currently fund all of our expenditures for indigent care and in-patient hospital costs for eligible incarcerated individuals, while the state supplies 100 percent of funding for some adults served in state health care programs that would be eligible for Medicaid. These, combined with hospital charity costs, far exceed the amount Texas would be required to contribute to expand Medicaid. New revenue from insurance premium taxes and economic growth from the infusion of $100 billion in federal funds would provide additional revenue sources. Furthermore, opting out of the expansion will not reduce Texans' federal tax burden, nor will expanding Medicaid increase it.

Concerns that the federal government will not be able to maintain high match rates in the future are unlikely to become reality given that Congressional representatives and senators represent their states. To ensure against this event, however, Texas could build in an automatic ``trigger,'' such as Arizona is doing, to reduce Medicaid optional populations and services should Congress reduce the match rate in the future.

Governor Rick Perry has described extending Medicaid to low-income adults as "adding more passengers to the Titanic.'' It would be closer to the case to say that failing to cover adults will doom them like those hapless travelers. Experience in other states indicates that the death rate would fall by 6.1 percent for adults under age 65 if the state expands Medicaid, preventing premature deaths of 5,700 Texas adults in each of the five years following the implementation year, or 28,500 Texans over five years. Previous studies also have found reductions of 5.1 percent in the child mortality rate and 8.5 percent in the infant mortality rate attributable to Medicaid coverage.

Such studies led one author from the Harvard study, Arnold M. Epstein, to conclude: Sometimes the political rhetoric is at odds with the evidence, such as claims that Medicaid is a `broken program' or worse than no insurance at all; our findings suggest precisely the opposite.

CONCLUSION

Extending Medicaid to low-income adults will save tens of thousands of lives and improve millions more over the next decade and beyond. The jobs created will support hundreds of thousands of people and boost the economy. The additional tax revenue will benefit state and local governments and important public purposes such as education, infrastructure and public safety. Businesses will benefit from healthier employees and lower employer insurance costs.

State and local government and the state's hospitals collectively spend far more on piecemeal health care for low-income Texans than the state's expected match for the expansion. Expanding Medicaid would move thousands of people into managed care from these programs and significantly reduce the use of expensive emergency room treatment for routine care.

Without expanding Medicaid to adults, Texas will still have to find additional state match for many of the eligible but unenrolled children identified in this report--but without the benefit of the additional state funds that an expansion would free up and without the new revenues that the additional federal funding would generate.

The decision to expand Medicaid--or not--will affect the lives of millions of Texans for years into the future and is arguably one of the most important decisions that the Legislature has had to make in decades. If politics are set aside, the right decision is obvious.

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