Federal judge rules for Texas, temporarily restores federal health care funding extension

Friday’s temporary reinstatement by a federal district judge of a 10-year extension to a federal health program Texas uses to pay for uninsured Texans’ health care was temporary. The program is worth billions annually and it is used by Texas for its health care needs.

After federal health officials in April pulled the Trump-era extension of the 1115 waiver agreement — which Texas had with the U.S. Centers for Medicare & Medicaid Services since 2011, and is up for review every few year — the agreement was due to expire next. Texas was ordered to solicit public input while it negotiates a new extension beyond the October 2022 expiration.

However, the decision did not affect the funding of the current waiver. It provides $3.87Billion in annual funding to partially offset the cost of Texas hospitals’ care for the uninsured and to fund innovative health care programs that help low-income Texans.

U.S. District Judge J. Campbell Parker issued Friday’s order granting a preliminary injunction to Texas to prevent the federal government rescinding its original Trump-era agreement. If Texas wants 1115 funding after October 2022, the decision will remove Texas’ requirement to negotiate with CMS.

CMS’s decision was “likely illegal” and caused “turmoil in state’s Medicaid program,” Barker stated in the order. This was partly because the state had already started “reassigning personnel, making plans and appropriating money, passing regulations and engaging stakeholders to work towards implementing necessary changes”. The original deal was confirmed in January, Barker said.

Texas Attorney General Ken Paxton applauded Barker’s decision on Friday. He had filed a lawsuit to restore the 10-year agreement. President Joe Biden used the April CMS action as a political ploy to press the state to expand Medicaid.

“The Biden Administration believes they can continue to violate federal law repeatedly.” Their disgusting power grab here would have ripped a $30Billion hole in Texas’s Budget, as well as sacrificed many vulnerable Texans to the well-being and violation flagrantly of the fundamentals a Constitution republic,” Paxton stated in a written statement.

Recent surveys show that a majority of Texans support expanding Medicaid, which would allow for millions more people to be covered by Medicaid.

Originally granted by Donald Trump in his final days, the 10-year extension would have allowed hospital reimbursements to continue until September 2030, but it would have ended the innovation fund.

Although the 1115 waiver was intended to be temporary as Texas moved to expanded Medicaid under the Affordable Care Act, 2010, that didn’t happen because the U.S. Supreme Court ruled that states could not be forced to expand Medicaid.

Since then, Texas has relied upon the waiver to fund various programs that care for the uninsured in Texas. Republican state leaders often rely on it when arguing against Medicaid expansion.

Paxton filed a lawsuit against Biden’s administration in May over the decision not to extend the extension. Paxton claimed that Biden was using the extension as a political tool to push Texas to expand its Medicaid program to more working adults.

The Medicaid expansion supporters claim that Texas didn’t meet the public notice requirements. They also argue that the 1115 waiver or extension was used to dissipate increasing pressure on conservative state leaders not to let Texans without private insurance be eligible for the government program.

In June, there were two public hearings as well as a public advisory meeting.

Texas has the highest number of people without health insurance in the country. It is also one of 12 states that refuse to allow Medicaid eligibility to be expanded to individuals earning up to 138% of federal poverty levels, as permitted by the ACA.