Citing costs and ideology, the governor said Texas would not expand Medicaid coverage nor create a state health care exchange.
Texas turned down an expansion of Medicaid coverage and said it will not create a state-run health care insurance exchange, joining other states that are rejecting two key parts of the Obama administration's health care overhaul.
In a letter to Health and Human Services Secretary Kathleen Sebelius released Monday, Texas Gov. Rick Perry laid out his objections, saying, "I will not be party to socializing health care and bankrupting my state.''
He added: "I stand proudly with the growing chorus of governors who reject the Obamacare power grab.
''Neither a 'state' exchange nor the expansion of Medicaid under this program would result in better 'patient protection' or in more 'affordable care.'"
Last month, the Supreme Court upheld most of the Patient Protection and Affordable Care Act, President Obama's signature legislation that was narrowly passed by Congress and has been widely opposed by Republicans.
But in upholding the bulk of the Obama program, the high court gave the states broader power by ruling that the federal government cannot withhold states' Medicaid allotment if they don't expand the program for the poor. The expansion was a key part of the health care law because it increased access to insurance for the poor.
States can also avoid establishing the online health care exchanges, designed to offer a marketplace where consumers can comparison-shop for the best insurance deal. That provision was touted in the original legislation as a way of curbing rising insurance costs.
U.S. can create exchanges
If states refuse to establish such an exchange, the federal government can create one for them.
Federal subsidies of $6,000 per person, designed to make the insurance affordable, are tied to the exchanges. Critics of the program argue that only those in state-run exchanges are eligible for subsidies, while the federal government insists that the subsidies apply to the exchanges it establishes as well. The exchanges are to be available by 2014.
In rejecting the two pillars of the health care law, Perry argued that adding millions of Texans to the Medicaid program would create a financial burden. According to state figures, about 2 million people would be added to Texas's Medicaid rolls in the first two years. And according to the state, the expansion would cost $27 billion over 10 years -- numbers disputed by Democrats.
The costs of those currently eligible for Medicaid is generally shared by the states and federal government in a 50-50 split.
But under the 2010 health care law, Washington will pay 100 percent of the cost for the newly eligible Medicaid enrollees for two years, then reduce it to 95 percent. In 2020, the federal share drops to 90 percent.
So far, Louisiana, Florida, Mississippi, Iowa and South Carolina have announced that they oppose the Medicaid expansion, while some other states are taking a wait-and-see approach until after the November elections.