The Texas health care system is hemorrhaging money.

Emergency room doctors see critically ill poor people every day who waited too long to seek help because they lack health insurance. The ER doctors provide them with just enough care to responsibly send patients on their way, knowing full well that while the patients will likely return, they will probably never pay the bill.

Hospitals have complained about this problem for at least 15 years and have coped by quietly padding the bills sent to insurance companies, driving up health care costs for the rest of us.

While this has worked for a while, the number of uninsured people continues to rise in Texas, and health care providers are demanding that lawmakers find a sustainable solution by expanding coverage for the poor.

"It's at a critical point in Texas. We need a more rational way to finance Medicaid and the uninsured," Memorial Hermann CEO Dan Wolterman said. "The current way we are doing it is not helpful. It's actually harmful."

Wolterman reiterated points I'd heard from dozens of health care providers while I reported at the Texas Capitol, but this time there was an added urgency. He'd just learned that Memorial Hermann will need to pass on between $600 million and $700 million in uncompensated health care costs to the people who pay their bills.

"We've been able to pass on those costs through higher insurance premiums, but the days of doing that are running out because insurance premiums are too high already for everybody," he told me. "When premiums get too high, employers can't afford it, and they drop insurance, and that raises the number of uninsured and that creates more costs. You get this downward spiral."

The potential solution and the political problem is Medicaid, the program that conservatives love to hate. The 50-year-old program is funded 60 percent by the federal government and 40 percent by the state, and at a minimum provides care to the disabled, impoverished children, pregnant women and the extraordinarily poor.

Texas has some of the strictest Medicaid limits in the U.S., and the GOP-controlled Legislature has rejected $85 billion in new federal funds over 10 years to include the working poor who cannot afford insurance through the Affordable Care Act. During the 2013 legislative session, conservatives rejected the expansion of Medicaid on fiscal grounds, even though it meant Texas taxpayers double-pay for treating the uninsured, first through federal tax money the state rejected and secondly through higher insurance premiums.

Gov. Rick Perry has demanded that the Washington send all of the money to Texas with no strings attached, but the federal government insists Texas follow federal law. The result is the highest uninsured rate in the country despite the nation's strongest economy.

"The governor and the Legislature have made it clear Texas will not be choosing to expand Medicaid," state Sen. Charles Schwertner, Republican chair of the Senate Health and Human Services Committee, said at a hearing earlier this month.

'An accurate picture'

But he also said the 24 percent uninsured rate and escalating health care costs are equally unacceptable.

"My intention ... is to start a conversation that will give us an accurate picture of who the uninsured are, what services are available to those individuals, and find ways to fill gaps in services in a fiscally responsible manner," he said.

Perry's and Lt. Gov. David Dewhurst's departures next year create an opportunity for lawmakers to find what is code-named the "Texas Solution" for expanding health care for the working poor, while providing political cover for conservatives.

One major theme of the Senate hearing was the conservative demand that patients take some responsibility for their health care, something that most health care professionals support. A Texas solution could offer a plan for the working poor - not called Medicaid but using federal dollars - that requires patients to make co-payments based on a sliding scale or by using a fee schedule that makes preventative treatments free and unnecessary emergency room visits cost-prohibitive.

Removing the politics

Wolterman also suggested leveraging a program that currently funds one-time costs to overhaul the current Medicaid system, called the Delivery System Reform Incentive Payment, and use that money to expand coverage. Since the money is not allocated under the Affordable Care Act and lawmakers can easily shut down the program if it doesn't work, it could take the politics out of the issue.

Lawmakers need to do something not only to reduce employer premiums, but also to protect Texas businesses that employ the poor people who qualify for Medicaid expansion. Because Texas doesn't offer them Medicaid and they can't afford to buy insurance, tax consulting firm Jackson Hewitt has estimated Texas employers will pay between $266 million and $399 million in penalties for not providing them with insurance.

Failing to provide health care to the working poor makes no fiscal sense, no matter how you run the numbers. Health care is one of the most important industries to Houston and Texas, and finding a solution for the uninsured will make the state's economy stronger if lawmakers can put the politics behind them.