States Considering Opting Out

Republicans in the Texas state legislature have floated a proposal to opt out of the federal-state Medicaid program citing their belief that they could provide more cost-effective and efficient care by giving up federal funds entirely or by getting federal waivers to provide health care on their own terms. The federal government currently covers 60 percent of the Texas $45 billion biennial Medicaid budget. About a dozen states, including Alabama, Mississippi, Washington, and Wyoming, apparently are also considering redesigning their Medicaid programs. Some are considering eliminating federal financing to give states maximum control while others are considering seeking federal waivers to allow states to change parts of their Medicaid programs. Some conservatives are claiming that if states dropped Medicaid, many low income people would instead receive federal subsidies to buy private insurance coverage through the state health insurance exchanges created by the Affordable Care Act. States would then become totally responsible for Medicaid beneficiaries who require long term care. Health care experts are trying to determine how serious the states are about these plans and whether their plans are even possible.

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