Perry turns down extra Medicaid funds

AUSTIN (KXAN) - Gov. Rick Perry says Texas does not plan to implement a state insurance exchange or expand Medicaid as part of the president's recently court-upheld federal health care reform. On Monday, he sent a letter to U.S. Health and Human Services Secretary Kathleen Sebelius stating his opposition.

• Read the letter here .

“I will not be party to socializing healthcare and bankrupting my state in direct contradiction to our Constitution and our founding principles of limited government,” Perry said in a statement.

The insurance exchange -- the pool of insurance providers from which patients can choose their coverage -- is not optional. But if Texas does not set up its own system, it would have to take one the federal government designs.

“We don't know what these exchanges are going to look like,” he told Fox News. “There's still a substantial amount of wording in this legislation that I'm pretty sure Congress is just now reading for the first time and that we're being forced to try to participate in.”

While rejecting an expansion of Medicaid, Perry called for the allocation of such funding in block grants so each state can adjust the program to “specifically serve the needs of its unique challenges.”

“The real issue here is about freedom, and the State of Texas has decided through the years that we have the best interest of our citizens not the federal government,” he told Fox. “If we can make those decision in Austin, Texas, and at the local level, we'll best deliver health care for our citizens.”

Perry has suggested a Medicaid system that establishes reasonable benefits, personal accountability and limits on services. His office described his idea as one that would also allow co-pays or cost sharing that apply to all eligible groups and tailor benefits to needs of the individual.

The Texas Health and Human Services Commission told KXAN a possible expansion in Texas would result in an additional two million people receiving Medicaid. Texas already pays for more than three million people on Medicaid and has a multi-billion dollar shortfall for the program this biennium.

Additional Texans on the rolls would surely cost the state severely, in a time when Medicaid already faces a multi-billion dollar shortfall in this budget cycle.

The U.S. Supreme Court ruled states may not be punished for rejecting the Medicaid expansions. But Democrats quickly criticized Perry's decision to turn away additional funding.

“Rick Perry’s announcement is both cruel and negligent,” said Rebecca Acuna, spokeswoman for the Texas Democratic Party. “No person with a speck of intelligence would turn down billions in federal dollars that would be a boon to our economy and help Texans. Once again Perry is putting partisan political pandering in front of the interests of Texas."

This comes at time when a Texas Medical Association study shows the number of Texas doctors willing to accept government-funded health insurance plans for the poor and elderly is dropping dramatically. Doctors are complaining about low payment and red tape.

Only 31 percent of Texas doctors said they were accepting all new patients who rely on Medicaid, the health insurance program for the poor and disabled. In 2010, the last time the survey was taken, that number was 42 percent.

The doctor's reluctance to take on new Medicaid patients comes as the new health care law proposes adding six million new people to the Medicaid rolls. The association, which has 46,000 members, conducts the survey of 1,000 doctors every two years. The association says greater efficiency and a fair payment system are needed.