The federal Department of Health and Human Services announced on April 22 that it has withdrawn its legal challenge to Texas’ Medicaid 1115 Waiver, which will now remain in effect until 2030.
The Medicaid 1115 Waiver program is a federal funding agreement that reimburses hospitals for the uncompensated care they provide to patients without medical insurance. This amounts to $7 million in funding per day for Texas hospitals.
As The Texas Tribune explained, the waiver program was initially approved in 2011 as a temporary measure to encourage Medicaid expansion under the newly passed Affordable Care Act. However, shortly after the waiver program was enacted, the U.S. Supreme Court ruled that the U.S. government cannot force state governments to expand their Medicaid programs.
The Republican leadership of Texas has remained firm in its resolve not to expand Medicaid. Still, the party has pursued extensions of the Medicaid waiver program to continue to fund medical services for low-income patients. Former Republican President Donald Trump authorized a five-year extension of the program for Texas in 2017, which would have expired in 2022, but in 2020, he granted another 10-year extension.
Shortly after the Biden administration took office, the Centers for Medicare and Medicaid Services (CMS) rescinded the program’s extension in April of 2021, urging Texas and 11 other states to expand their Medicaid programs.
The following month, Texas Attorney General Ken Paxton sued to reinstate it. In August, a federal judge ruled that the extension should remain in place while the federal and state governments negotiated the details of the waiver extension.
On Friday, the CMS relented, announcing that it would not continue to challenge the 10-year extension of the waiver program.
In a letter to state health officials, the CMS stated that “it is not the best use of federal government resources to continue to fight this case. This should resolve the issue without the need for further litigation and will create no disruption to the people who rely on Texas’ Medicaid program.”
Senator John Cornyn of Texas remarked that he was delighted the Biden administration discontinued its efforts to oppose the extension of the waiver, chastising its rescission as a “boneheaded maneuver” that harmed Texans.
Governor Greg Abbott slammed the federal government’s resistance to the waiver renewal but praised the decision on Friday to extend it until 2030.
“The original rescission by the Biden administration last April obstructed healthcare access for vulnerable Texans and took away crucial resources for rural hospitals in Texas, and I am grateful that Texans will now continue to have access to the health care resources they need,” he stated.
Although the waiver’s future is secured until 2030, Texas hospital officials are still pushing for additional initiatives to help cover the cost of caring for the largest uninsured population in the country.
“While funding, staffing, and COVID-19 continue to challenge hospitals, we look forward to having a solid foundation to work from and rebuild,” said John Hawkins, president and CEO of the Texas Hospital Association. “The long-term health of our safety net must remain strong, and we will continue to underscore the need for coverage expansion, rates that more closely match the cost of care, and a stable uncompensated care pool.”
