October 13, 2006 | Volume 3, Issue 2
Outsourcing Care
Replacing Medicaid with Cross-Border Care in Texas
“He who has health has hope, and he who has hope has everything.”
-Arabian Proverb
In 1996 Congress passed the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) stripping welfare and Medicaid benefits from legal immigrants residing in the U.S. for less than five years. Although PRWORA changed benefit eligibility for only a small percentage of immigrants, this population is among the most uninsured in the United States.1 The legislation disproportionately impacts Texas where between 2000 and 2003, nearly 300,000 foreign nationals became legal permanent residents (LPR) who could no longer enroll in government entitlement programs.2
PRWORA particularly exacerbates the crisis of immigrant uninsurance on the border where public health and health infrastructure continues to falter. High resident-physician ratios, few specialization services in areas like pediatric surgery, and a high rate of uninsured residents have overextended the South Texas medical system.3 Here uninsured immigrants often use regional facilities intended to provide emergency and clinical care as primary care facilities. As human and capital medical resources are overstretched, the public at large suffers.
Anecdotal evidence suggests that a considerable number of individuals living near the border cross into Mexico seeking affordable care. Many are recent immigrants who appreciate the low cost and care Mexican health providers offer. California has taken the unprecedented step of authorizing insurance programs to offer discounted coverage for consumers willing to obtain non-emergency care in Mexico, extending insurance to those who could not normally afford it. While similar plans have been introduced in the Texas Legislature, pressure from the Texas Medical Association has repeatedly blocked such legislation. The California model offers an affordable employer-based solution to the insurance needs of immigrants ineligible for Medicaid, which could be implemented in the South Texas community. The Texas legislature must assert community need above industry interest and incrementally establish cross-border health care plans.
Why: The Extent of Immigrant Uninsurance
Under today’s federal PRWORA guidelines, legal permanent residents entering the country after 1996 are eligible only for emergency Medicaid services, vaccinations, and communicable disease services.4 Approximately 935,000 non-citizens lost Medicaid benefits due to the passage of PRWORA[5] and the proportion of immigrants lacking health insurance has increased since its implementation.6 Texas has the highest uninsurance rates in the nation and counties along the Texas-Mexico border suffer the lowest coverage rates in the state.7 Moreover, Texas faces ever-increasing Medicaid costs, and even under a limited benefit system, the proportion of uninsured residents continues to grow.8 Hispanics in Texas are twice as likely as whites not to have health insurance, and for immigrants, the gap in coverage is even wider.9 Texas’ uninsured are four times more likely to report forgoing necessary care, and three times more likely to report difficulty financing care when sought.10
Uninsured immigrants drive up state medical costs, as poor access to medical services often leads to aggravated health problems that are more expensive to remedy and are paid for by the public through emergency Medicaid.11 In the current era of decreased funding and growing need, expanding entitlement eligibility is not a feasible solution, particularly because of growing public sentiment against budgetary constraints such as welfare and immigration policies. Providing low cost health insurance options to employers that traditionally cannot afford health benefits is a market solution that will increase the rate at which the working poor are insured, particularly recent immigrants formerly eligible for Medicaid.
While the border presents unique medical and economic challenges, it also offers a unique resource – Mexico, where health care costs for routine procedures are much lower than in the U.S. While there are no statistically representative studies concerning Texas residents crossing the border for care, informal reports and localized studies suggest that this practice is widespread.12 A UCLA study of Laredo, a Texas border town, found that only 49 percent of the city’s workforce had employer based insurance – the lowest rate of eighty-five metropolitan areas surveyed.13 As a result, just over 41 percent of residents cross the border seeking Mexican health care.
Individuals with lower income were more likely to do so: nearly half of inhabitants with wages below $20,000 access regular medical care in Mexico, while only 21.5 percent of those earning over $35,000 sought care outside the U.S.14 This trend is corroborated by numerous small-scale studies dating from the 1980’s which suggest that those seeking cross-border care are satisfied with outcomes and will continue to seek it whether or not insurance is available for these services.15 Nonetheless, low-income residents still face an unfair disadvantage in having to pay out-of-pocket costs. Bi-national health insurance plans would provide a way for residents already crossing the border to avoid excessive medical costs.
Clinics and hospitals within walking distance of the border provide low cost services to individuals who would otherwise go without. Access to these physicians permits the continuous affordable care of a single doctor, improving care quality.16 Texas may use policy created in states such as California as a model to expand access to care for recent immigrants and mitigate the South Texas health care crisis.
How: The California Model
During the summer of 1992, five percent of border-crossings from Tijuana to San Diego were reportedly for medical care or pharmaceuticals.17 Though American insurance companies licensed in California have always been able to sell cross-border plans, the market remained untested and unrecognized until legislative reforms in 1998 and 2003 extended the privilege to Mexican companies, which drew American companies to the market.18 Since 2000, California cross-border Health Management Organizations (HMOs) have offered low cost insurance for care received in Mexico.19 Two U.S.-based insurers (Blue Shield of California and Health Net, Inc.) cover two-thirds of the 36,000 enrolled Californians, while the Mexican HMO SIMNSA covers the remainder. On average, these insurance plans cost 40% – 50% less than traditional ones and are prevalent in industries with historically low rates of employee coverage.20 Enrollees typically earn $5 to $7 an hour and would not otherwise have employer-based care. While cross-border health insurance dates back to the 1950’s, an era that saw a rise in immigrant rights and insurance coverage,21 the most recent California model has spread beyond non-agriculture industries as U.S care costs have increased.22
The California Department of Managed Health Care (CDMHC) regulates the quality and provision of benefits as well as, fiscal accountability of all state licensed HMOs including those with cross border plans. Though Mexican authorities regulate Mexican providers, all grievances filed in Mexico must be reported to the CDMHC, which may revoke licenses to operate in California.23 Under this system, HMOs investigate the quality of participating doctors and hospitals, specifically sanitation, infection control, and training.24 Thus, the model relies on Mexican quality regulation and grievance systems. While little incentives exists for insurance companies to comply with California’s required grievance report, the system may be strengthened through intergovernmental cooperation. Better communication would allow states to collect grievance information from Mexican regulators.
The National Conference for Quality Assurance’s quality indicators established in Mexico permit standardized cross-border quality measures. These measures give U.S. insurers a tool to scrutinize Mexican doctors and facilities.25 In addition, American citizens have full access to Mexico’s National Commission of Medical Arbitration (CONAMED), an independent agency that investigates complaints and irregularities within the Mexican healthcare system. It also settles grievances regarding medical services and also reserves the right to bring complaints and claims before Mexican courts.26 Thus, Texas residents opting for cross-border care may use the Mexican regulatory bodies and practices already in place. Texas stakeholders who insist that cross-border care would be unregulated and void of quality insurance may be unaware of these safeguards.
Though California’s model sets a precedent for states like Arizona and Texas with similar demographics and insurance concerns, little scholarly work has explored policy’s health outcomes.27 Figures collected by insurance companies are proprietary and remain secret. Border states will be slow to follow the cross-border model unless its results are quantified.28 Action by the California legislature to release figures for analysis would allow the policy’s proponents to demonstrate its success.
Reform in Texas
Several cross-border care bills introduced in Texas have died in committee.29 The most recent attempt, SB 2498 filed March 15, 2001, was converted into an Interim Study Committee upon reaching the Senate. The bill would have allowed Mexican nationals and U.S. citizens within sixty-two miles of the border to enroll in cross-border plans under an amended HMO Act. Services rendered in Mexico would operate under Mexican law and be regulated by Mexican authorities just like the California model.30
Interim Study Committee hearings convened in the fall of 2002, during which stakeholders uniformly testified to the immediacy of the South Texas uninsurance and medical infrastructure crisis. Reform supporters included non-profit clinics, HMO and insurance companies, and academics.31 Proponents of cross-border care cited dire insurance statistics, the pervasiveness of chronic conditions (such as diabetes and hypertension) which require preventative care, and California’s preliminary success as justifications for passing such legislation. They also contended that limited access to preventative care leads to much higher costs later, which will buckle the region’s troubled system under its weight. Improved access to low-cost care in Mexico would mitigate the negative health outcomes associated with reduced access to care.
Advocates acknowledged that employer based insurance is the most efficient way to address chronic disease, but that small businesses employing most South Texas residents are least likely to offer employee health insurance. Because approximately 46% of Texas’ employed but uninsured population works for firms with less than twenty-five employees, low cost cross-border plans could have a large impact on state uninsurance by making employer-based plans more affordable.32
Opposition
The Texas Medical Association (TMA), the only outspoken opponent, questioned the regulation standards imposed on Mexican care and the impact on doctor liability.33 It was also concerned that lower-cost cross-border plans would lure insured patients south of the border, where questionable quality assurance was a fear unto itself. TMA representatives even suggested that declining demand for traditional plans might tempt companies to stop offering them.34
These objections are based upon incomplete information, a misunderstanding of Mexican healthcare regulation, and unrealistic assumptions concerning the fiscal impact of cross-border plans. As discussed above, established Mexican regulatory authorities monitor cross-border plans operating in California. While quality assurance standards differ across the border, American citizens have equal protection under Mexican law and have sufficient recourse for insurance and quality grievances. In addition, TMA mischaracterizes the economic impact cross-border plans would have on American practitioners. Participants are unlikely to have been among the “paying” customers South Texas practitioners rely on. Rather, they are far more likely to have been among the uninsured who contribute to the region’s uncompensated care. Thus, cross-border insurance would alleviate some strain and expense currently imposed upon South Texas’ medical infrastructure.
Bridging the Divide – Steps Toward Implementation
Because the TMA is the primary obstruction to cross-border insurance, the first step toward cross-border care must be educating the medical community about the safeguards already in place in the Mexican health system. Further emphasis on the economic, health, and cultural benefits of this plan are crucial to garnering medical and consumer support. To demonstrate these impacts:
- The state must have access to information regarding participant health outcomes currently considered proprietary by health insurance companies in order to assess the program’s effectiveness.
- Texas agencies responsible for regulating state insurance must establish cooperative relationships with California and Mexican regulatory bodies to understand how cross-border plans operate, to appreciate the safeguards in place, and to recognize opportunities for improvement on the existing model. Cooperative strategies could include visits by California regulators to Mexico to observe implementation and the creation of a bi-national committee to identifying communication break downs and establish policies to correct them.
- A large-scale information campaign targeting potential consumers of cross-border insurance should advertise the availability and affordability of such plans. This is especially important since many potential consumers of cross-border insurance have not taken advantage of the market.
- To encourage participation, tax incentives should be offered to businesses that do not traditionally offer health benefits.
These suggestions constitute steps to win legislative support from all interest groups, ease the transition to cross-border regulation, and ensure a market for bi-national plans.
Moreover, expanding Medicaid coverage is not within the financial means of either the state or federal government given recent deficits and the eligible number of individuals if LPRs were again enrolled. Despite Texas’s minimal benefits, Medicaid represents 22% of the state budget.35 Offering cheaper, employer based cross-border insurance would address the South Texas immigrant care deficit in the private sector at minimal cost to the state.
While many of the concerns expressed by the TMA are addressed by California’s model, and further assuaged by the afore-mentioned points, policymakers must present the initiative slowly to achieve stakeholder buy-in. By initially limiting cross-border care to recent immigrants and Mexican nationals, policymakers can minimize the chance for failure, making the bill more appealing to the legislature. Regulation may then grow with the bill. Congress may amend problems and expand on successes by decreasing eligibility requirements as public and private support grows.
Texas has the advantage of seeing California’s successful incremental implementation and expansion. California recently increased the geographic area served by cross-border plans, incrementally expanding implementation once the policy proved successful. Texas could mimic this strategy by initially limiting eligibility to LPRs and Mexican nationals. This approach would marginalize the market loss concerns expressed by TMA and the Commissioner’s worries regarding American’s citizens’ navigation of the Mexican court/grievance system.
Increased access to preventative and primary care will undoubtedly lower the need for emergency services as immigrants seek care before disease progresses to more harmful and expensive levels. Of course, cross-border care is only feasible for those living within a certain, limited distance of the border, and would be restricted to Mexican nationals and legal permanent residents to start. Given South Texas’s dire insurance and health infrastructure situation however, this impact would be substantial. Recent immigrants are likely to take advantage of such plans, since many already cross for care. With early success, the program could expand to provide low-cost coverage to much more of the uninsured public.
Endnotes
1 Leighton Ku and Sheetal Matani, “Left Out: Immigrants’ Access to Health Care and Insurance.” (p 249–250) Health Affairs. Jan/Feb 2001. Online. Available http://content.healthaffairs.org/cgi/reprint/20/1/247.pdf. Accessed November 11, 2005.
2 Ibid 250
3 Texas Senate: Interim Committee on Binational Health Benefit Plan Coverage. October 15, 2002. Audio. Online. Available: http://www.senate.state.tx.us/75r/senate/commit/c1000/c1000.htm. Accessed November 13, 2005.
4 Michael Fix and Jeffrey Passel, “The Scope and Impact of welfare reform’s Immigrant Provisions.” Assessing the new Federalsm: An Urban Institute Program to Assess Changing Social Policies. Urban Institute. January 2002. Online. Available: www.urban.org. Accessed November 24, 2005.p. 6
5 Levinson, Amanda, “Immigrants and Welfare Use.” Migration Policy Institute. Online. Window on Migration Information Source. August 1, 2002. Available: http://www.migrationinformation.org/USFocus/display.cfm?ID=45. Accessed December 4, 2005.
6 Ibid
7 Michael Landeck PhD, Cecilia Garza, PhD, “Utilization of Physician Health Care Services in Mexico by U.S. Hispanic Border Residents”. Health Marketing Quarterly, Vol. 20(1) 2002. Pg 7.
8 Texas Statewide Coordinated Statement of Need. Texas SCSN Steering Committee, Texas Woman’s University for the Texas Department of Health to U.S. Department of Health and Human Services. July 31, 2004. Health Resources Services Administration. HIV/AIDS Bureau. Pg 74.
9 Ibid 77
10 Ibid 77
11 Ibid 77
12 Ibid 7
13 Ibid 6
14 Ibid 12
15 Elena Bastida, Shelton Brown, III and Jose Pagan, September 21–22. “Health Insurance, Health Care and Socio Economic Disparities along the US Mexico Border: Evidence from the Border Epidemiologic Study of Aging”. Powerpoint Presentation. (Presented at a conference on “Aging in the Americas,” at the University of Texas at Austin,)
16 Sonya Geis, “California Health Costs Send Patients to Mexico Facilities.” Washington Post. November 13, 2005.
17 Ibid 8
18 Adam Lenert and Yael Cohen, 2004. “California Legislation and Regulation.” Cross-Border health Insurance Options for Texas. Project Directed by David Warner and Pablo Schneider. The University of Texas at Austin. Pg 20.
19 Richard Marosi, “Healthcare is Migrating South of the Border; California employers are steering Latinos to Mexico, where care is less costly but uneven.” Los Angeles Times. August 21, 2005. Online. Available: Lexis-Nexis. Accessed: November 29, 2005.
20 Ibid 2
21 Ibid 2
22 Sonya Geis, “California Health Costs Send Patients to Mexico Facilities.” Washington Post. November 13, 2005.
23 Adam Lenert and Yael Cohen, “California Legislation and Regulation,” Border Workforce Issues: Credentialing of Health Professions in the U.S. and Mexico. 2002–2003 Policy Research Project, the LBJ School of Public Affairs. Directed by David Warner. Pg 20.
24 Richard Marosi. “Healthcare is Migrating South of the Border; California employers are steering Latinos to Mexico, where care is less costly but uneven.” Los Angeles Times. August 21, 2005. Online. Available: Lexis-Nexis. Accessed: November 29, 2005.
25 Texas Senate. Interim Committee on Binational Health Benefit Plan Coverage. September 9, 2005. Online. Available: http://www.senate.state.tx.us/75r/senate/VidArchives/02.htm. Accessed November 29, 2005.
26 Adam Lenert and Yael Cohen, p.25
27 Marisa Walker and Robert Guerrero. “Cross-border Health Insurance Initiatives in California, Texas and Arizona.” Powerpoint Presentation. January 30, 2003. Online. Available: http://oed.arizona.edu/pubs/az-mexico/pubs/Cross-BorderInsurance.pdf. Accessed December 8, 2005.
28 Texas Senate. Interim Committee on Binational Health Benefit Plan Coverage. September 9, 2005.
29 Ibid 88
30 Ibid 88–89
31 Ibid
32 Marisa Walker and Robert Guerrero. “Cross-border Health Insurance Initiatives in California, Texas and Arizona.” Powerpoint Presentation. January 30, 2003. Online. Available: http://oed.arizona.edu/pubs/az-mexico/pubs/Cross-BorderInsurance.pdf. Accessed December 8, 2005.
33 Ibid
34 Ibid
35 Hayden. “Understanding the Executive Budget and State Health Care Priorities.” November 14, 2005. Guest Lecture: Politics and Process: Gender, Health, and Society. The LBJ School of Public Policy.