Perry’s Medicaid ‘Reforms’: $500 Million Misspent With Lethal Consequences In Texas

Both as governor of Texas and as the leading Republican presidential candidate, Rick Perry has established himself as a critic of federal programs – and in particular as a “state’s rights” advocate who accuses Washington of gross ineptitude and waste in providing services such as health care for the poor and elderly. In his 2010 book Fed Up and his campaign speeches, Perry has often asserted that the states could perform far better if they were simply left to do the job without federal interference.

“It is through states that the American people get the job done every day,” he wrote in Fed Up, “often in spite of a deeply flawed bureaucratic federal government.” Late last year, when he was urging Texas to drop out of Medicaid altogether, he said, “We know how to deliver healthcare to more people in a less expensive way than what the federal government doe [sic]. I need more states need to stand up and say we don’t want your strings attached. We don’t want you down here telling us how to run our business.” If only Texas could operate wholly independently of federal rules, he insisted, “you will see more people in the state of Texas who will have more coverage and frankly we’ll save money at the end of the day, as will the federal government.”

Although Perry was forced to abandon that scheme when a state report showed that leaving Medicaid would cost Texas billions and leave even more Texans uninsured, he still claims that the federal government should stop trying to make sure that more Americans have health care – and that programs run solely by the states would be more efficient and effective. But the “golden teeth” Medicaid scandal in Texas, now under investigation by the inspector general of the Department of Health and Human Services, has exposed those claims to fresh scrutiny. A Dallas TV station reported that Perry appointees have allowed tens of millions of dollars to be misspent on orthodontic braces for children who don’t need them – with huge profits for private dental clinics owned by Wall Street hedge funds.

And that is not the only aspect of Perry’s Texas record that belies his boast. One of the most embarrassing episodes during his first two terms as governor involved a plan to let private firms run Medicaid, replacing state employees. The privatization plan was an “innovation” that was supposed to save money. What it accomplished instead was to earn enormous sums for contractors like Deloitte Touch and Accenture, along with their Texas lobbyists, while costing Texas taxpayers hundreds of millions of dollars – and all without achieving its most basic objectives.

Four years after the plan was implemented in 2003, the Austin American-Statesman published a thorough report on its results, and what the newspaper found was a project “in shambles.” The state had been forced to cancel its contract with the Accenture group and continue to use state employees to perform necessary work on an outdated computer system, exactly the same as before Perry’s privatization scheme began. How much had this great innovation cost the state? Approximately $500 million, not including the amount spent using the old system, at roughly $1 million a month.

Perry’s fiasco wasted more than money and time, however. As the Statesman reported, it may well have cost a 14 year-old boy named Devante Johnson his life. Left without health insurance for several months because of the Texas Medicaid enrollment bureaucracy, the Houston boy could not get treatment in time to save him from the kidney cancer that eventually killed him in March 2007.
But none of this fazed Perry at all. He went on to reappoint the Texas health and human services commissioner who had overseen the entire fiasco to another term – and then to run for president as the candidate who will reform the federal entitlement systems.


Start your day with National Memo Newsletter

Know first.

The opinions that matter. Delivered to your inbox every morning

{{ }}