Texas sues to block 'Biden's power grab' to strip state of Medicaid waiver

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The Biden administration was slapped with a lawsuit on Friday after Texas Attorney General Ken Paxton launched a suit countering changes to the state’s federally funded portion of Medicaid last month.

In April, the administration rescinded a Trump-era eight-year extension to provide billions of dollars in federal funds annually for Texas’ uninsured residents, which was set to expire next year.

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While the move does not revoke healthcare funding through 2022, Paxton called it an "unlawful abuse of power aimed at sovereign states."

"The Biden Administration cannot simply breach a contract and topple Texas’s Medicaid system without warning," he said in a Friday statement.

Texas has held a waiver agreement with the U.S. Centers for Medicare and Medicaid Services since 2011, which reimburses hospitals for the "uncompensated care" provided to uninsured individuals along with innovative health care projects.

The Trump-granted extension would have continued funding for hospital reimbursements through 2030 but would have dropped the innovation funds allotted through the waiver. 

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Paxton claimed that the move was a political strategy to force states like Texas to expand their Medicaid program under the federal healthcare plan.

"Not only does this violate agency regulations and threaten to rip a $30 billion hole in Texas’s budget, it was clearly intended to force our state into inefficiently expanding Medicaid under the Patient Protection and Affordable Care Act (ACA)," the Texas attorney general said. "This would be a disaster for our state, and yet President Biden seems intent on thrusting his bloated model of government on everyone—including Texas." 

Biden pushed billions of dollars in federal incentives earlier this year to encourage Texas lawmakers to join 38 other states and expand their Medicaid. 

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The waiver was originally intended to serve as a bridge to help states cope with expanding their Medicaid programs under the Affordable Care Act, or "Obamacare." But, in 2012, the Supreme Court ruled the ACA could not require states to expand their programs.

Texas, which has the largest uninsured population in the U.S. according to the Austin-based publication, has relied on the waiver for the last decade.