Why Texas Republicans still oppose Medicaid expansion

One of two surgical suites at Eastland Memorial Hospital. Eighteen percent of Texans don’t have health insurance, the highest rate in the nation. (Credit: Gary Rhodes for The Texas Tribune)

One afternoon in April 2021, state Sen. Nathan Johnson sprinted through the Texas Capitol building, determined to reach the House chamber in time to see history made. For one of the few times since the Affordable Care Act was passed in 2010, the full Texas House was going to vote on a proposal to expand Medicaid, the program that provides health care to America’s poorest.

Eighteen percent of Texans don’t have health insurance — the highest rate in the nation — and Johnson had already filed five pieces of legislation that session to use Medicaid expansion to get as many as 1.2 million of those people insured.

To him, the approach made sense. The federal government would pick up 90% of the cost. Research showed that by rejecting Medicaid expansion, Texas was turning its back on more than $5 billion in federal money every year.

All of Johnson’s bills were likely dead that session, doomed by opposition from Republicans whose hostility toward the Affordable Care Act goes back to 2013, when then-Gov. Rick Perry called it a “criminal act.” But as he ran to the House chamber that day, Johnson clung to a faint hope that this new effort would succeed. Nine Republicans had recently signed on to a House version of his last expansion bill, suggesting that cracks were forming in the GOP front.

If Republicans were looking for a way to expand Medicaid on their own terms, this bare-bones amendment to a House budget bill could be it.

State Sen. Nathan Johnson, D-Dallas, speaks from his desk on the Senate floor on Wednesday, Aug. 11, 2021. (Credit: Jordan Vonderhaar for The Texas Tribune)

Introduced by Houston Democrat Garnet Coleman, it simply directed state health officials to take advantage of all the federal Medicaid dollars available to extend coverage to low-income Texans. Since it didn’t specify what expansion had to look like, Republicans could design a program that allowed them to take the money on their own terms. They could frame it not as a legacy of the Obama administration, but as a common-sense, Texas-style plan to protect patients and providers.

A similar customized approach had worked in other red states, and Johnson thought it might work in his, too. His own Medicaid bills had tried to do something similar.

“It was sort of an offering, in a way,” the first-term senator from the Dallas area told Public Health Watch. It “really made it easy for Republicans. ‘Take this and make it yours ... Just go do it however you want to.’”

Johnson listened nervously from the back of the chamber that day as Coleman and other Democrats implored lawmakers to accept the federal money.

Giovanni Capriglione, a five-term representative from Southlake, a suburb of Dallas, was the only Republican who spoke. “I think you know where you stand on this issue,” he told his fellow party members. “I would ask you to vote no.”

The debate lasted just 20 minutes.

Coleman’s amendment failed, 80 to 68. Only one Republican, Lyle Larson, a representative from the San Antonio area, voted in favor.

Johnson felt sick as he walked out of the chamber that day.

As a Democrat, he was accustomed to seeing his bills blocked in the Republican-dominated legislature. But this loss felt different.

Of the nine Republicans who had supported a House version of Johnson’s recent expansion bill, only Larson had voted for Coleman’s amendment. Public Health Watch reached out to all nine, but only Larson responded.

Anne Dunkelberg, who has studied Texas health policy for decades as an analyst with the progressive nonprofit Every Texan, said it’s an open secret that many Republicans privately acknowledge expansion is a good deal for the state. But she said they’re fearful of publicly breaking with their party’s leaders: Gov. Greg Abbott and Lt. Gov. Dan Patrick.

Anything related to Medicaid expansion is “DOA with Abbott and Patrick,” Dunkelberg said. “There’s a very strict set of marching orders and they have nothing to do with analysis of potential impacts and facts.”

Both Abbott and Patrick have made opposition to the Affordable Care Act and Medicaid expansion part of their political personas.

When Abbott was the state’s attorney general in 2010, he drew national attention by filing a lawsuit to get the ACA thrown out. After he became governor, he led another lawsuit to overturn the health care law.

Patrick, who previously served as a state senator, has a similar track record.

“You know, one of the best things we did in the Senate, when I was a senator … we did not expand Medicaid,” Patrick said during his 2018 reelection campaign.

Abbott and Patrick are both hoping to hold onto their seats this month. Their campaigns have not emphasized their opposition to Medicaid expansion, perhaps because a 2020 poll found that 69% of Texans support it.

Abbott’s Democratic challenger, Beto O’Rourke, is promising to expand Medicaid, but he’s behind in the polls. “Literally, Greg Abbott is the only person in this state standing in the way of connecting more than a million of our fellow Texans with health care,” O’Rourke told Public Health Watch.

Public Health Watch sent multiple emails to Abbott and Patrick asking for their current positions on Medicaid expansion or for any other plans they have to close the state’s health care gap.

Patrick didn’t respond. Abbott sent a statement citing cost as a reason for his opposition. He described Medicaid expansion as “a tax increase waiting to happen.”

“The best way to get health care insurance is through an employer,” Abbott said. “Since I was re-elected, Texas has added more new jobs than any other state ... Medicaid was created to serve the most vulnerable, not able-bodied adults who can and should get health care through an employer.”

But finding a job that offers health benefits isn’t all that easy in Texas.

Less than half the state’s private-sector firms offer health insurance, according to the latest federal data. Among businesses with 50 workers or less, that number falls to below 25%.

* * *

Texas Republicans rarely talk about their opposition to Medicaid expansion these days, but a 32-year-old think tank—the Texas Public Policy Foundation—proudly promotes their position any chance it gets. In January, Abbott thanked the foundation publicly for helping him pass his political agenda last year.

The foundation is connected to some of the state’s leading conservative donors. According to its tax filings, it took in more than $17 million in 2020.

The foundation’s website is filled with links to its own articles and reports opposing Medicaid expansion, many of them written by David Balat, a former hospital administrator who directs the foundation’s Right on Healthcare initiative. The foundation also holds events across Texas, many of them hosted by local chapters of its Liberty Leadership Council, a program aimed at people ages 21 to 40.

Adrian Shelley, director of the Texas office of Public Citizen, a consumer advocacy group, said conservative lawmakers often depend on the foundation to educate them on complicated policy topics.

“It’s extremely influential,” Shelley said. “Its priorities become the priorities of very influential conservative members of state leadership.”

Larson, the lone Republican to vote for the House expansion proposal, said the foundation floods GOP lawmakers with emails and fact sheets telling them how to vote. “It’s 50% bullshit and 50% information they twisted,” he said. “It doesn’t allow you to have a candid conversation like they’ve had in those other red states about forgoing those federal dollars.”

The foundation lists “stopping Medicaid expansion” among its 2021 legislative “victories.”

On the day the House voted on Coleman’s amendment, the foundation’s then-CEO, Kevin Roberts, released a statement describing Medicaid as a “sinking ship.” Expansion would “bust” the state budget, he said, and “hurt everyone involved.” Roberts is now president of the conservative Heritage Foundation, one of the most prominent think tanks in Washington, D.C., and a longtime opponent of the ACA and Medicaid expansion.

Research from states where Medicaid has been expanded show it has had little effect on state budgets.

The Waco-based Perryman Group, which specializes in economic research and analysis, estimates that for every $1 Texas spent to expand Medicaid, $1.78 would come back in the form of state revenue, with most of it going to local governments. Expansion could also lower the taxes that Texans now pay to local hospital districts to cover care for the uninsured.

Ray Perryman, the firm’s CEO and president, thinks Texas Republicans’ opposition is fueled by one simple fact: They are afraid to support any policy associated with former President Barack Obama.

“It’s really unfortunate, because nobody’s sitting back and just looking at the numbers and looking at the reality of the situation on the ground or listening to their constituents for that matter,” he said.

Medicaid expansion was one of the ACA’s key coverage provisions when it passed in 2010. But after a 2012 U.S. Supreme Court decision, that requirement became an option, leaving the decision to expand in the hands of state legislators.

The result is that in the 12 states that still reject expansion, more than 2 million people have fallen into a coverage gap, meaning they make too much money to qualify for state Medicaid and too little to get subsidies in the ACA marketplace. A third of those people live in Texas, whose Medicaid program is so restrictive that parents in a family of three are denied coverage if they earn more than $4,000 a year.

* * *

In October, about 50 people, many of them students, gathered at the University of the Incarnate Word in San Antonio for one of nearly a dozen events the Texas Public Policy Foundation held that month. This one focused on ways to tackle the high cost of health care. Participants got a free lunch and heard a panel discussion moderated by Balat.

The speakers lauded solutions like price transparency tools and primary care subscriptions, which typically charge patients a monthly fee for a certain set of services. The arrangements aren’t considered insurance and state insurance regulators have no oversight.

One panelist referenced a 2013 Oregon study that conservatives have long cited as proof that Medicaid expansion doesn’t result in better health outcomes. But the Oregon study didn’t examine ACA Medicaid expansion, which didn’t go into effect until 2014.

Research conducted in expansion states since then shows the policy change is associated with better access to care and increased financial stability for rural hospitals by reducing uninsured visits. Texas leads the country in rural hospital closures.

Balat insists that expanding Medicaid won’t improve Texas’ health care access gap. “Coverage isn’t care,” he said, referring to the fact that in Texas, as in many states, Medicaid patients often have trouble finding doctors who will accept the public insurance.

A report released last year, based on 2017 data, found that only about 65% of Texas doctors accept Medicaid patients, primarily because the state reimburses them at much lower rates than private insurers do. According to the Texas Medical Association, state lawmakers haven’t passed a meaningful, across-the-board update to the Medicaid physician fee schedule since the late 1990s.

Asked if the foundation would support raising the reimbursement rates, Balat said he doesn’t have enough research to take a position. He said the foundation will, however, continue opposing Medicaid expansion in the next legislative session, which begins in January.

* * *

The first efforts to pass expansion in Texas began in 2013 as the Affordable Care Act was going into effect. A Republican state representative from Richmond, John Zerwas, tried to hammer out a Texas-style version that incorporated ideas popular with conservatives, like making sure it was cost-neutral to the state.

Observers thought Zerwas’ bill had a chance. So did Zerwas, a physician. But it died in committee. The Texas Public Policy Foundation was the lone group to testify against it.

“People on the pay scale above me made the decision,” Zerwas said at the time.

Zerwas is now executive vice chancellor for health affairs at the University of Texas System. He said he never worried about losing his House seat over his Medicaid stance — he didn’t think it was a dealbreaker for his constituents. But he suspects Republican politicians in other parts of the state fear that primary voters will boot them out of office if they break with party leaders on Medicaid expansion.

“If there is something equally as cost-effective that doesn’t have a direct line to Obamacare, I’m all for that,” Zerwas said. “But there’s not.”

Eight years later, in 2021, another Texas Republican tried to bring home those federal expansion dollars. Lyle Larson, the sole Republican who voted for Garnet Coleman’s expansion proposal in the House last year, tried to put expansion on the ballot so the public could weigh in. His legislation died in committee, too.

Larson, a longtime fixture in San Antonio politics, entered the Texas House in 2010 as a self-described “Reagan Republican.” He has a reputation for refusing to toe party lines — something that landed him on the wrong side of GOP leaders over the years. When Larson ran for reelection in 2018, Abbott endorsed his primary opponent, Chris Fails, who dubbed Larson “Liberal Lyle.” But Larson won handily.

Larson is retiring in January after six terms in office, not because of pressure from his own party, he said, but because he believes no elected state official should serve more than 12 years, an issue he repeatedly tried to advance in the legislature.

When it comes to Medicaid expansion, he said, his party has a “bunker mentality,” fearful of alienating a governor with presidential aspirations who has built a career off opposing the ACA.

Public opinion doesn’t seem to make a difference. During the last legislative session, nearly 200 Texas organizations — including the Texas Medical Association and local chambers of commerce — sent a letter to Republican leaders urging them to expand health coverage for low-wage adults. It didn’t matter, Larson said.

“We’re just locked into listening to a few voices that don’t provide one bit of health care,” he said.

Texas’ resistance to expansion has become the butt of jokes in neighboring GOP states, Larson said. Republican lawmakers in bright-red Arkansas, which passed a conservative approach to Medicaid expansion in 2013, tell him they “sort of laugh at Texas.” After expansion, their state’s uninsured rate dropped more than 10 percentage points within two years.

“They’re saying, ‘Why are you passing up on those [federal] dollars? It makes no sense,’” Larson said.

* * *

Johnson, the Democratic senator who watched the House kill Rep. Coleman’s expansion proposal last year, isn’t deterred by the string of failures he and others have registered over the years. And he isn’t afraid of a fight.

A lawyer by training, Johnson has made expansion a priority since 2018 when he defeated incumbent Don Huffines — then considered one of the most conservative Republicans in Texas. So just weeks after Coleman’s proposal was defeated, Johnson gave it one more shot and introduced a similar version in the Senate.

It failed, too. Every Republican voted no. But it was a small step forward. For the first time, the full Texas Senate had voted on a bill to expand Medicaid.

“I think before it was sort of like it’s just this distant place we’re trying to get to,” Johnson told Public Health Watch. “I think we’re there. We’ve just run into a wall. That’s the shift. We’ve got to the wall now.”

Johnson is up for reelection this month. On his campaign site he describes Medicaid expansion as the “single most powerful policy tool available to Texas” to improve public health. If he wins, he plans to introduce another expansion bill in 2023.

He doesn’t expect Abbott or Patrick to change their minds about expansion anytime soon, but he has hope. “Notice how quiet they’ve been on the subject for the last two or three years,” he said.

In the meantime, he’ll keep having one-on-one conversations with his Republican colleagues about Medicaid expansion.

“I think Republicans would love a way to do it, and I’m going to look for a way that helps them.”

This story is part of "The Holdouts," a reporting collaborative focused on the 12 states that have yet to expand Medicaid, which the Affordable Care Act authorized in 2010. The collaborative is a project of Public Health Watch and is supported by grants from The Commonwealth Fund and the T.L.L. Temple Foundation. The contents of this article do not necessarily reflect the views of T.L.L. Temple Foundation or any director, officer or employee thereof.

Disclosure: Every Texan, the Texas Medical Association, the Texas Public Policy Foundation and the University of Texas System have been financial supporters of The Texas Tribune, a nonprofit, nonpartisan news organization that is funded in part by donations from members, foundations and corporate sponsors. Financial supporters play no role in the Tribune's journalism. Find a complete list of them here.

Correction, Nov. 7, 2022: An earlier version of this story incorrectly stated that the Texas House first took a full vote on Medicaid expansion in the 2021 legislative session. In fact, the House also voted on budget amendments to expand Medicaid in 2017 and 2019.