“Perrycare” defined

by Robert Nagle on 6/11/2013

in Health & Nutrition,Right and Wrong,Texas/Regional

For better or worse, the Affordable Care Act (the new health care reform law) has been dubbed “Obamacare.”

Here’s  another neologism: PerrycareIt is  is defined as health care inside a state which has refused Medicaid expansion despite generous financial incentives to do so. It is characterized by skyrocketing health care premiums and overall costs for individuals who fall below  138% of the federal poverty line. Named after Texas Republican governor Rick Perry. 

Even though this graph doesn't take into account that many kids go on their parents' plan until 26, it is still an alarming amount of people

Here are some other characteristics:

  • The population between 19-26 have the highest level of poverty. On the other hand, they are still eligible to be on their parents’ plan (that is, if their parents have a plan!). In general, people in this age range are healthy and would require care mainly for emergencies (or giving birth).
  • The population between 26 and 30 have high rates of poverty. They are no longer on their parents’ plan; on the other hand, it is assumed that their income will have risen a bit depending on how long they have been in the workforce. Females are particularly at risk here because these are generally the child-bearing years.
  • The population between 30-65. More likely to have savings, but on the other hand, more likely to have serious conditions and require several visits.

The Kaiser Foundation has prepared a health care rate calculator. Note that it provides two estimates: the estimate under Obamacare and Perrycare. According to the site’s FAQ, “The federal poverty level varies by family size. In 2013, it is $11,490 for a single adult and $23,550 for a family of 4. The poverty level is estimated for 2014 based on Congressional Budget Office projections of inflation.”

On a positive note, medical underwriting  will be prohibited on Jan 1 2014 under Obamacare, so very low-income individuals will be able to purchase a plan without having to go through underwriting; they just won’t be able to afford it!

Update: Here’s a cost estimate from Kaiser about just how much money Texas is not going to spend and not going to receive:

TEXAS (population: 26 million) 

Without Medicaid expansion, between 2013-2022, feds would spend 228 billion and TX state would spend 159 billion on Medicaid for Texans.

With Medicaid expansion for 2013-2022, feds would spend 305 billion and TX state would spend 168 billion on Medicaid for Texans.

In other words, spending 9 billion dollars more on Medicaid in Texas will prompt the feds to spend 77 billion more dollars on health care for Texans over the next decade.

New York (population 19 million)

Without Medicaid expansion for 2013-2022, fed pays 468 billion, and NY state pays 451 billion for New Yorkers.

With Medicaid expansion for the same time period, feds pay 553 billion, NY state pays 433 billion for New Yorkers.

In other words, because NY already  pays a greater amount  into Medicaid,  Obamacare will cause New York to spend 18 billion dollars less on Medicaid,  while the feds will spend 85 billion dollars more on health care for  Medicaid in New York.

A Rand analysis estimates other effects from deciding to opt out of Medicaid expansion.

If 14 states decide not to expand Medicaid under the Affordable Care Act as intended by their governors, those state governments collectively will spend $1 billion more on uncompensated care in 2016 than they would if Medicaid is expanded. … In addition, those 14 state governments would forgo $8.4 billion annually in federal payments and an additional 3.6 million people will be left uninsured… “State policymakers should be aware that if they do not expand Medicaid, fewer people will have health insurance, and that will trigger higher state and local spending for uncompensated medical care,” Price said. “Choosing to not expand Medicaid may turn out to be the more-costly path for state and local governments.”…


Researchers also outline how failing to expand Medicaid could have more than financial consequences. Based on earlier research showing that past expansions of Medicaid has led to decreases in deaths, the study estimates that an additional 19,000 deaths could occur annually if the 14 states studied do not expand Medicaid.

My rough  ballpark estimate is that Texas accounts for a third of the population of those states opting out of Exchanges and Medicaid  expansion. Therefore, applying the Rand’s data to Texas, we could say that Perry’s decision not to expand Medicaid will cost Texans somewhere in the range of  $300 million and result in 6000 more deaths.

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