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Without Medicaid Expansion, Texas' High Rate of Uninsured Likely to Persist, Says Dallas Fed

For immediate release: December 10, 2015

Southwest Economy also highlights impact of OPEC strategy, value of Texas ports and insights from a banking veteran

DALLAS—Texas leads the nation in uninsured residents, and that trend is likely to continue as long as the state declines to expand Medicaid eligibility as part of the national health care program, according to the latest issue of the Federal Reserve Bank of Dallas’ Southwest Economy.

For the past decade, Texas had led the nation in the share of its residents lacking health insurance, currently at 19 percent. The state now also has the largest number of residents with no health insurance, surpassing California, which has a much larger population.

“Texas is one of the 20 states that has neither embraced Medicaid expansion nor signaled it will likely do so by the end of 2015,” write Jason Saving and Sarah Greer in “Texas Health Coverage Lags as Medicaid Expands in U.S.” While there are arguments for and against participating in Medicaid expansion, related to either financial and policy considerations, or both, “the best available estimates suggest that Texas, by not signing on, will save about $5.7 billion in state funds over the 2014–22 period. … On the other hand, those $5.7 billion in state funds would have been accompanied by an estimated $65.6 billion in federal funds that would have flowed to Texas if it were participating in Medicaid expansion.”

Even without expanding Medicaid, Texas’ share of uninsured residents fell 3 percentage points in 2014, the authors write. This can be attributed to a combination of residents enrolling in the Affordable Care Act’s health insurance exchanges and increased enrollment in Medicaid by those who were previously eligible but either weren’t aware of the program or might have had qualms about signing up, according to the authors.

The decision by the Organization of the Petroleum Exporting Countries (OPEC) to keep on pumping has led to falling oil prices, hurting producers in Texas and the rest of the U.S., write Martin Stuermer and Navi Dhaliwal in “OPEC Likely to Keep Pumping Despite Budget Woes of Some Members.” The strategy has come at a cost to OPEC’s members as well, and the broad differences among member countries’ ability to withstand low oil prices make OPEC supply cuts unlikely.

“Overall, the OPEC strategy is one of collateral damage, where all parties are losing but some can sustain more losses than others,” the authors state. “It is highly unlikely that OPEC will agree to curb production in the short-to-medium term.”
In “Texas Ports Stay Busy as Trade Values Fall Along Gulf, Rise Inland,” Jesse Thompson explores the economic impact of exports sent via Texas ports. The value of trade moving through Texas was 5.1 times higher in 2014 than in 1996, reflecting an expansion of about twice that of the rest of the U.S.

“Over time, each of five port districts covering the state has charted its own path through shifting trade patterns as free-trade agreements, globalization, a growing economy and increased oil and gas production changed the landscape of Texas commerce,” Thompson writes. “These same forces are driving investment in infrastructure to meet anticipated demand to move more goods in and out of Texas.”

This issue of Southwest Economy also includes an “On the Record” conversation with Richard W. (Dick) Evans, who will retire in March 2016 as chairman and chief executive officer of San Antonio-based Cullen/Frost Bankers Inc.

Evans reflects upon lessons he learned during his 44-year career in the banking industry, which included serving on the board of the Dallas Fed. In particular, Evans discusses how Frost Bank was able to navigate the fallout from the Texas oil bust in the 1980s and how the current oil price decline is different. He also weighs in on opportunities and challenges facing the Federal Reserve System, emphasizing the need for a balance between data-driven analysis and real-world insight.

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Media contact:
Alexander Johnson
Federal Reserve Bank of Dallas
Phone: (214) 922-5288
Email: alexander.johnson@dal.frb.org