Perryman: Lack of health care for some means economic pain for all

M. Ray Perryman

Since the expiration of COVID-19-related provisions requiring states to keep residents enrolled in Medicaid, an estimated 2.1 million Texans have lost their coverage. Texas has by far the highest number of uninsured in the country and has removed significantly more individuals from health care coverage than any other state.

The primary reason to maintain and expand health insurance access is to help some of the state’s most vulnerable residents to obtain needed care, thus improving their lives. While many hospitals and clinics provide treatment to the uninsured, there is a substantial cost to be borne by those facilities, the local taxpayers who subsidize uncompensated care, and those with private insurance who face higher premiums to offset these expenses.

Beyond the health consequences to the affected people and families, health insurance coverage involves significant economic and fiscal benefits. With 2.1 million fewer Texans covered by health insurance, health-related spending decreases, reducing business activity in communities across the state and throughout the economy.

Uncompensated care also rises, along with insurance premiums. In addition, it becomes more difficult for people to obtain the care that they need, causing negative effects on morbidity and mortality outcomes and, in turn, decreasing productivity. Lower productivity associated with adverse health outcomes reduces economic activity.

- FWBP Digital Partners -

We estimated the economic costs of decreasing the number of Texans covered by health insurance by 2.1 million and found that, if the situation persists, the state loses $58.9 billion in annual gross product and almost 509,200 jobs (including multiplier effects). Economic harms are spread across the state. (For more detail and regional results, see www.perrymangroup.com.)

Texas is among the most difficult states to qualify for Medicaid and is one of only a handful which have not expanded Medicaid under the Affordable Care Act. Our analysis has indicated that state funds required to access federal resources available for health insurance expansion would be more than returned to the state in dynamic tax revenue. There would also be benefits to local government entities including both higher revenues and lower costs for uncompensated care. Moreover and more importantly, the well-being of Texans could be enhanced, thus promoting sustainability.

Millions of Texas children and adults do not have health insurance, and the number is rising rapidly. Most cannot afford private insurance and find it difficult to obtain basic or preventive health care. Texas could alleviate a substantial portion of this problem and support the state’s health care system by expanding health insurance coverage using available federal funds. It could also provide a lifeline to the fragile rural health care network. Notable economic and fiscal gains would be an outcome of this process, and millions of Texans would have better access to the health care they need. Stay safe!

Dr. M. Ray Perryman is President and Chief Executive Officer of The Perryman Group (www.perrymangroup.com), which has served the needs of over 3,000 clients over the past four decades.