Some lawmakers want to bring more people under the Medicaid umbrella

AUSTIN — In a private meeting with Houston-area state lawmakers last week, Gov.-elect Greg Abbott brought up a topic so radioactive in Texas politics that even the mention of it caught the room off guard, according to three of those present.

The longtime attorney general, who made a name for himself by suing President Barack Obama and his administration, asked for more information about a compromise recently struck by the Republican governor of Utah and the federal government that could pave the way for that heavily conservative state to expand Medicaid through the president’s signature health care law.

“I don’t even know anything about the Utah model, but it was encouraging because it sounded like at least he’s looking at options,” said one of the attendees, Rep. Carol Alvarado, D-Houston, who supports Medicaid expansion. “It was like, if he’s bringing this up, he’s not shutting the door on it. I think he’s open to looking at it.”

However brief the exchange, which an Abbott spokeswoman declined to confirm or otherwise discuss, the reaction that it generated in the room illustrates the surprising optimism of some supporters of a Medicaid expansion compromise in Texas heading into next year’s legislative session.

Twenty-seven states now have accepted some form of Medicaid expansion, including eight with Republican governors; proposals are under discussion in seven other states, including Utah, according to the nonprofit Henry J. Kaiser Family Foundation. An effort to get Texas to negotiate with the federal government on a compromise stalled in the Legislature in 2013, but a coalition of liberals, moderate conservatives, hospitals, businesses, social service organizations and local government officials is gearing up for a heavy push this time around.

State Rep. John Zerwas, a Richmond Republican and close ally of House Speaker Joe Straus, is expected to once again lead the campaign.

The strange bedfellows have come together because uninsured residents typically end up in emergency rooms, where they are much more expensive to treat. Hospitals and counties are forced to pay the costs, which in turn leads to higher medical costs and property taxes.

The Obama administration is offering initially to pay for almost all of the costs of expansion, which would increase eligibility up to 133 percent of the federal poverty line and by 2016 cover some 1.2 million of the more than 6 million uninsured Texans, according to the White House.

Supporters here are pushing something called “The Texas Way,” which would include incentives for newly-covered residents to work and require them to contribute to their medical costs based on their ability to pay.

The plan still would still cost the state millions of dollars, however, and opponents consistently have said they are leery of spending any more on a Medicaid system they say is broken. Skeptics also fear the federal government, at some point, will stop contributing to the costs, leaving the state to decide whether to spend billions of dollars to continue the policy.

To be sure, the odds of any form of expansion start out as slim in a Legislature that is expected to be one of the most conservative in recent memory. The Senate, in particular, is expected to pursue an agenda supported by the tea party under the leadership of Lt. Gov.-elect Dan Patrick.

A spokesman for Patrick, who staunchly opposes the health care law, did not return a message seeking comment.

One of his allies, Sen.-elect Paul Bettencourt, R-Houston, said he does not think there is an appetite for any compromise for expansion, particularly because a case about challenging the Affordable Care Act is pending before the U.S. Supreme Court.

The high court said it would hear oral arguments in March about the constitutionality of subsidies for consumers who purchase health insurance through the law’s federal marketplace.

Zerwas, the leader of the Medicaid expansion effort in Texas, said he was focused on a different recent development: the acceptance of individually tailored expansion compromises by the Republican governors of Tennesse, Utah and Wyoming just since the midterm elections.

The Utah plan, called Healthy Utah, would include work incentives and cost sharing, as well as encourage the purchase of local health plans. Gov. Gary Herbert said this month that it included the most flexibility of any state yet.

The plan has faced heavy criticism in recent days for not being as innovative as promised, and a legislative task force recently declined to endorse it.

John Davidson, a health care policy expert at the conservative Texas Public Policy Foundation, said problems with compromises in other states is one reason why he does not expect Texas to act on expansion next year.

“Rebranding Medicaid expansion as 'The Texas Solution’ or 'The Texas Way’ doesn’t actually change the fundamentals,” Davidson said. “It is Medicaid, and that means it’s an entitlement, and there’s not much you can do about that.”

brian.rosenthal@chron.com