CMS decision to rescind Texas’ Medicaid waiver extension rekindles bipartisan effort for coverage expansion

Tags: Texas Legislature, 1115 waiver, Medicaid expansion, Medicaid

By Jonathan Nelson

After the Centers for Medicare and Medicaid Services announced it would pull out of an agreement to extend the Texas Medicaid 1115 Transformation Waiver for 10 years, a bipartisan group of Texas House members joined health care organizations including TAFP, employers, and advocacy groups to push for a plan that would increase coverage for Texans.

The 1115 waiver allows hospitals to draw down federal funds to cover uncompensated care costs incurred when uninsured patients can’t pay for their care. While CMS subsidizes those costs for hospitals, community physicians are not covered by the waiver. The state’s current waiver remains in effect until Sept. 30, 2022, but this recent decision by CMS throws into question the stability of Texas’ health care safety net programs after that date.

In November 2020, the Texas Health and Human Services Commission requested a five-year extension of the waiver and CMS granted a 10-year extension. Under the Biden administration, CMS has reconsidered its decision and while the state has plenty of time to revise and resubmit its request, the situation has sparked new energy in the effort to pass coverage expansion in the 87th Texas Legislature. According to an April 21, 2021 story by KUT 90.5 FM, Austin’s NPR station, “Advocates say this could open the door for a broader conversation about Texas’ climbing uninsured rate.”

Even though Texas has both the highest number and the highest percentage of uninsured residents in the nation, it is one of only 12 states that have refused to expand Medicaid under the Affordable Care Act. Expanding Medicaid would provide coverage to 1.5 million to 2 million uninsured Texans while bringing in an estimated $2.5 billion in federal funding each year. Plus, under the latest COVID relief package, Texas is eligible for an additional $3.9 billion over two years if it expands coverage.

In a letter sent Monday to Gov. Greg Abbott, Lt. Gov. Dan Patrick, and Speaker Dade Phelan, a coalition of almost 200 organizations called for the Legislature to utilize available federal funds to increase coverage for uninsured Texans. “It is imperative that the Texas Legislature and leadership act now to capture this additional funding. Texans cannot wait,” the letter said.

Several bills to expand Medicaid have been filed this session but none have gained any headway. With only a few weeks left, lawmakers will have to act fast if they want to address access to coverage.


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  • Roger Fowler, MD said

    I strongly endorse expanding Medicaid to cover our uninsured.

  • Charles Henley said

    It is hard to see a political downside when expanding Medicaid would bring in a lot of money to the State and provide health coverage to many more Texans, Texans who vote.

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