Economic snapshot: The Affordable Care Act

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Texas stands to benefit significantly from the Affordable Care Act if the uninsured buy insurance with federal subsidies and if elected leaders decide to expand Medicaid, which would cover more than 1 million low-income residents.



Obamacare comes to Texas
Business Columnist [email protected]


Staff Artist [email protected]

The Affordable Care Act, a.k.a. Obamacare, continues to divide politicians and the public, even as key provisions are scheduled to begin Jan. 1. Texas stands to benefit significantly if the uninsured step up and buy insurance with federal subsidies. And if elected leaders decide to expand Medicaid, the state would add coverage for more than 1 million low-income residents.
Texas’ big targets
Most people get health coverage through large employers and government programs, and the law won’t affect them much. But Texas has millions of uninsured and many with individual policies. The law was designed to improve their lot.

Subsidies galore
Those without affordable insurance through their job may be eligible for federal subsidies to help pay monthly premiums. They can earn up to four times the poverty rate and still get significant help. No state has more eligible people than Texas. Tax credits for family of four These examples assume annual premiums of $12,500 and 2013 federal poverty levels. Annual income
$32,500 $47,100 $58,875 $70,650

Health coverage share, 2010-11
Employer-based 45% (11,473,600)

How we rank Number of residents eligible for tax credits Texas California Florida New York
2,049,000 1,903,000 1,587,000 779,000

Premium tax credit
$11,430 $9,530 $7,760 $5,790 $3,250

Pennsylvania 715,000
SOURCES: Families USA; Kaiser Family Foundation

Medicaid 16% (3,947,500)

Medicare 10% (2,491,100)

Other public 1% (317,100)


Prices rise, especially for the young
Unless they get subsidies, many will pay more for individual insurance that complies with the health law. It guarantees coverage regardless of health, provides more benefits and limits discounts for age. Estimated average monthly premiums*
$173 Post Affordable Care Act $132 Men Women

Uninsured 24% (6,143,500)

Individual plan 4% (967,000)
$94 $69 $80

$109 $107 $78 $59


$98 $78 $56

$76 $54

DallasFort Worth



San Antonio


*For catastrophic coverage for a 27-year-old
SOURCE: Texas Public Policy Foundation

How we rank
Percentage of uninsured Texas Nevada New Mexico United States Minnesota Hawaii Massachusetts
24% 22% 21% 16% 9% 8% 4%
SOURCE: Kaiser Family Foundation

Texas passes on Medicaid
About 21 states aren’t expanding Medicaid, catching many in a coverage gap. Many people earn more than Medicaid’s income limit (in Texas, that’s $3,737 per year for a family of three). But they earn less than the poverty line that makes them eligible for federal subsidies. Residents in the gap Texas Florida Georgia North Carolina Pennsylvania
409,350 318,710 281,290
SOURCE: Kaiser Family Foundation

1,046,430 763,890

The bottom line
“People are already saving with preventive care, Medicare drugs and adult children on insurance. We’re waiting for millions to finally get coverage. The feds must fix the website, the state should get out the message, and Texas has to find a way to expand Medicaid. More cost-sharing reduces utilization but some people skip medicine and get sicker.” Stacey Pogue, senior policy analyst, Center for Public Policy Priorities “My fear is that young invincibles won’t be motivated to get coverage, even with a subsidy. They’re crucial to making the economics work. In graduate school, I weighed the pros and cons and decided to go without. Under the law, young people can jump in and out. The more chances they have to game the system, the more likely they’ll do it.” Devon Herrick, senior fellow, National Center for Policy Analysis “Will politics and ideology keep trumping health and money? Texas will give up $100 billion if it never expands Medicaid. And light enrollment in the exchange will cost billions more in subsidies. Some GOP-led states added free-market ideas to their programs and declared victory. That will be tough here, because Republican leaders are eyeing higher office.” Mitchell Schnurman, columnist, The Dallas Morning News

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