Gov. Rick Perry announced Monday what many watching health care reform had long suspected: Texas will not be establishing a health care exchange.
Exchanges were drawn up as part of the Patient Protection and Affordable Care Act of 2010 as a way to help people purchase low-cost health insurance. Individuals must carry health insurance by 2014 or face tax penalties.
The law provides for a federal exchange where states don’t have one.
However, in upholding most provisions of the new law, the U.S. Supreme Court did not uphold the provision that required states to expand Medicaid — in essence, how subsidies would be funded in the exchanges, among other health care measures
U.S. Rep. Michael Burgess, R-Lewisville, said it’s not clear whether individual Texans would be eligible for subsidies when shopping for insurance in a federal exchange.
“That’s a question that will have to be resolved prior to these being set up,” Burgess said.
About 6.2 million Texans — a quarter of the state’s population — are uninsured.
However, Burgess said he agreed with the governor, and the leadership of other states, that are being cautious about expanding Medicaid.
In implementing reforms, “there are obstacles that already exist in the law — not any new ones that I would put in place — and the federal government is not prepared,” Burgess said. “These are precarious times to be dealing with the federal government.”
Burgess doubted that even the states establishing exchanges would be able to meet the Jan. 1, 2013, deadline to present their programs to the U.S. Department of Health and Human Services to be ready to meet the needs of individuals shopping for insurance.
“There’s a likely need for there to be a grace period,” Burgess said. “I don’t think anyone is ready.”
The state has estimated about 2 million people would be added to the Texas Medicaid rolls in the first two years if it went ahead with the expansion.
That expansion would cost the state $27 billion in the first 10 years, according to the Texas Health and Human Services Commission.
However, many Democrats dispute that estimate.
David Sanchez, the Democratic Party nominee for District 26, said the state has the most uninsured in the country and had an opportunity to continue to progress.
Better access to preventive care, for example, would save the state money in the long run.
“I’m disappointed,” Sanchez said. “I don’t understand why health care is being called socialism. We have an opportunity to increase people’s insurance coverage and he’s making the choice that we don’t want that.”
The Associated Press contributed to this story.
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