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Texas’ Perry rejects Medicaid expansion. What now? (+video)

Now that Texas Governor Rick Perry has rejected the federal expansion of the Medicaid program, health care providers in the state would like to see Perry's alternative health care plan. Others praised the governor's decision. 

By Robert T. GarrettThe Dallas Morning News (MCT) / July 9, 2012

In this June 7 photo, Texas Gov. Rick Perry speaks during the Texas Republican Convention in Fort Worth, Texas.

LM Otero/AP/File

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AUSTIN, Texas

Gov. Rick Perry’s declaration Monday that Texas should decline to expand Medicaid and leave creation of a health insurance exchange to the federal government could create burdens for the uninsured, local taxpayers and federal officials seeking to implement the federal health law.

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But it’s far from the last word on Medicaid, a continually vexing program for lawmakers.

Soon after Perry fired off a no-thanks-ma’am letter to U.S. Health and Human Services Secretary Kathleen Sebelius and a statement denouncing President Barack Obama’s signature health care law as a “power grab,” health providers said they’d like to see the governor’s plan for whittling into the state’s towering uninsured problem.

Perry didn’t offer one, though he expressed confidence that state officials would do far better if they could use the $18 billion of federal Medicaid funds the state receives each year without conditions.

“Block grant our dollars that we send up there back to the states, and Oklahoma or California or Texas … would make the right decisions about how to deliver health care in their states rather than one size fits all, our way or the highway,” Perry told Midland, Texas, talk-radio host Jason Moore.

The provision that Perry wants the state to reject would add to the state’s Medicaid rolls more than 1.5 million poor, childless adults who are currently ineligible, plus as many as 300,000 pregnant women, children and extremely poor parents who already qualify but aren’t enrolled.

The coverage would begin in 2014. In the first five years, the state’s costs for the expansion would be $5.8 billion, and Texas would receive $76.3 billion in federal matching funds. Despite that prospective gain, Perry said it would be unwise to enlarge “a broken system that is already financially unsustainable.”

The Republican governor also told Sebelius he opposes a state health insurance exchange, which he said would open the door to federal control of Texas’ insurance markets. Some other conservatives have argued Texas should take steps to set up the exchange on its own, in case the federal law survives. If it does, the federal government will establish the exchange.

Federal officials declined to respond directly to Perry, saying that under the law, the exchanges and other benefits will help expand coverage and pledging to work with states to provide flexibility.

Perry’s move was the latest political twist after the Supreme Court upheld most of the 2010 health care overhaul. While most of the legal battles have been over the law’s requirement that individuals obtain insurance, the bulk of the expansion of health insurance coverage is designed to happen at the state level, and GOP governors such as Rick Scott of Florida and Nikki Haley of South Carolina have rebelled.

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