Here’s What Medicaid Expansion Can Do for the Health of Your State

Faustinella and Auerbach are internists. Gajewski is a medical student who will soon start residency in internal medicine.

As the Texas House and Senate decide which issues to consider in the 2025 legislative session, we want to bring your attention to a matter that requires immediate action in our state: the need to accept expanded federal funding from Medicaid to support the health of Texans.

As healthcare professionals living in Texas, we see firsthand how this dire situation leaves countless Texans struggling to access essential health services. Texans, like all Americans, pay federal taxes. But unlike most other states, we do not accept our fair share to support necessary health services for low-income working citizens. Texas is one of 10 states that has not expanded Medicaid in the decade after the Affordable Care Act presented the option.

Texas lags in healthcare outcomes, ranking at the bottom of health indicators and bearing the unfortunate distinction of having the highest rate of uninsured adults (24.3%) and the highest sheer number: nearly 5 million individuals. Resistance to federal funding drives these unacceptable uninsured rates.

A vast body of research demonstrates the overwhelming advantages of closing the coverage gap. The benefits include the wider use of preventive services; improved diagnosis, treatment, and health outcomes for cancer, cardiovascular disease, diabetes, and hypertension; improved measures of self-reported healthy behaviors, including sexual and reproductive health; reduced mortality; and lower cost of care.

Contrary to a popular belief, a significant proportion of adults in the coverage gap are employed unless they are elderly or disabled. The most common jobs among adults in the coverage gap are construction laborer, cashier, cook, waiter, house cleaner, retail salesperson, and janitor. These workers usually do not have access to employer-based health insurance and cannot afford plans on the federal insurance exchange. They also are typically not eligible for the Texas STAR Medicaid program, unless they are pregnant, blind, disabled, elderly, or the parent of a child and making less than 16% of the federal poverty line for a family of three.

A related matter of deep concern is the ongoing closure of rural hospitals, which happens more frequently in states that have not accepted federal funds under provisions of the Affordable Care Act. Texas has the largest rural population in the nation and the largest number of rural hospital closures. Many rural communities are left without essential medical facilities and services, leaving residents with limited access to critical health services. The closure of these hospitals not only impacts the health and well-being of residents but also hurts local economies. It is estimated that a rural hospital closure, on average, costs 170 jobs and an annual payroll of $22 million.

To address these urgent challenges, Texas must consider the advantages of accepting 90% matching federal funds to dramatically narrow the coverage gap. Due to direct offsets to other state programs and increased premium tax income, this policy would generate net revenue for the state of Texas.

An additional 1,849,000 Texas residents would be covered if the state accepted matching funds. Predictably, with more Texans insured, health outcomes would improve, with a tangible spillover effect on greater work productivity and quality of life. Research from other states has shown that closing the gap would lead to increased financial security among the working low-income population; increased employment; reduced disability; reduction in rates of poverty, food insecurity, and home evictions; reduction of unpaid medical bills; improved credit scores; and reduced delinquency. Ultimately, a healthier population generates a more productive and vibrant workforce, leading to economic growth, stability, and prosperity for the entire state.

Importantly, the Medicaid of today is not the same program that launched in the 1960s and expanded in 2010. Over the past decade, under state leadership, the Texas Medicaid program transformed from a fee-for-service model to managed care, limiting the growth of public costs. The Texas STAR program is home-grown and can be scaled responsibly.

By refusing matching funds, Texas lost nearly $12 billion in federal dollars in 2023 alone. Again, as Texans, we are already paying for Medicaid, but our share of federal funds is diverted to other states, making us unintentional philanthropists to our own detriment.

The Perryman Group estimates that if Texas had chosen to narrow the coverage gap in 2021, the economic effects for the 2022-2023 biennium across the state would have included gains of $45.3 billion in gross product, $29.4 billion in personal income, and nearly 461,700 job-years of employment (which would have increased tax revenues). The net total dynamic fiscal benefits would have included $2.5 billion to the state and nearly $2 billion to local government entities across Texas.

Closing the coverage gap would have a profound impact on the lives of many Texans. It would energize our rural and urban economies, and it would benefit the state’s bottom line. This is a win-win policy change that enhances the medical and economic health of Texas. To do otherwise is ethically and financially indefensible in states that have yet to expand.

Fabrizia Faustinella, MD, PhD, is an internist and faculty member at Baylor College of Medicine in Houston. She is also a Doctors for America A. Gene Copello Health Advocacy Fellow. Alex Gajewski is a medical student at UT Southwestern, and will soon start residency in internal medicine at UT Southwestern/Parkland Hospital in Dallas. David Auerbach, MD, MBA, is an internist at the Dallas VA Medical Center and faculty at UT Southwestern Medical School in Dallas.

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