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Texas at the Crossroads: Health Costs and Health Coverage

Executive Director

This week marks the halfway point in is Texas’ 2016-2017 biennial budget cycle—and it’s already clear that legislators will face significant fiscal challenges when they convene in January.

Health care accounts for a significant share of the state budget. In 2017, legislators will face a crossroads in state health care finance: either they can take steps to stabilize health care funding by improving coverage and financing options, or they can shift an increasing share of health costs to local property tax payers.

Texas has the greatest number and percentage of uninsured residents of any state in the country. According to Census data compiled by the Kaiser Foundation, 17 percent of Texans are uninsured, compared to 10 percent of all Americans. For non-elderly adults, 23 percent of Texans are uninsured compared to 14 percent of all Americans. Implementation of the Affordable Care Act has increased coverage in Texas and the US, but it has not closed the gap that has existed between Texas and the national norm for more than two decades.

Lack of health insurance is a problem for Texas families. More than three quarters of uninsured Americans and Texans are employed, with a slightly higher share of uninsured Texans working full-time than for all uninsured Americans. Among parents of dependent children, 24 percent of Texans are uninsured compared to 13 percent of all Americans.

Lack of insurance is especially prevalent among low-income Texans, although Texas uninsured rates are higher than the national average even for the wealthy. For individuals in households with incomes below 100 percent of the federal poverty level, fully one-third of Texans are uninsured, compared to 21 percent of all Americans. For those in households with incomes 100 to 200 percent of the federal poverty level, 28 percent of Texans are uninsured compared to 18 percent of all Americans.

Pervasive lack of insurance creates distortions in funding for local health care systems. In particular, because hospitals are required to provide emergency care even for uninsured patients who cannot pay, local taxpayers wind up picking up the tab for an increasing volume of uncompensated care. In the past, Texas has relied on the federal government to subsidize local health systems, but the federal system is changing and the old crutches won’t be so available to Texas in the future.

Lack of health insurance contributes to relatively poor overall health status for Texas communities. According to the American Public Health Association’s America’s Health Rankings, Texas ranks 34th among the states in overall health status.

Texas has a choice. Lawmakers can take steps to increase coverage options for low-income households. Available federal funding would cover almost all of the cost of market-based coverage for close to a million Texans.

Inaction only will make things worse. Federal officials have signaled they will be reducing payments to offset local costs of caring for the uninsured. If lawmakers fail to identify alternative strategies, local communities will be forced to increase taxes or curtail vital health care services.

Texas Impact is engaging Texas faith communities in advocating for coverage expansion. We think it’s crucial that Texans in every part of the state understand what’s at stake for our state’s health care systems in the upcoming legislative session. Faithful action is important: visit Above Politics to sign up to participate in Texas Health Justice Sabbath and find suggested activities. Civic leadership is also important: Download our Guide to Legislative Advocacy for tips on talking to policymakers about the issues.

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