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AUSTIN (AP) — The White House’s signature health care law is loathed by Texas’ political leadership, and the idea of expanding Medicaid likely remains a non-starter when the Legislature reconvenes this month.

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But Gov.-elect Greg Abbott and many top conservatives support working with Washington to devise a federal block grant that would allow the state to remake Medicaid, a joint state-federal program that provides health care for the poor and disabled. Such an agreement could also earn Texas much of the up to $10 billion in annual subsidies that would have otherwise come via Medicaid expansion.

That idea may shape Texas’ renegotiations with the U.S. Centers for Medicare and Medicaid Services over an existing five-year, nearly $30 billion Medicaid waiver mostly used to reimburse hospitals for uninsured care and set to expire in September 2016.

Federal officials insist they don’t intend to use the expiring waiver as leverage to push Texas’ Legislature toward embracing Medicaid expansion. Still, advocacy groups say Obama administration officials aren’t likely to offer a block grant-like wavier without extracting at least some concessions.

“It’s not a matter of going and dictating that the feds write us a blank check,” said Anne Dunkelberg, associate director of the health and wellness program at the left-leaning advocacy group Center for Public Policy Priorities.

Texas leads the nation in uninsured, with nearly a quarter of its population — 6.4 million people — lacking health insurance. President Barack Obama’s health care law mandates expanding Medicaid to residents with incomes less than 138 percent of the federal poverty level, but the U.S. Supreme Court’s 2012 ruling made it optional, and Texas ultimately rejected expansion.

That created a “coverage gap” of more than 1 million Texans who aren’t poor enough to qualify for Medicaid but don’t earn enough to receive the law’s new subsidized health insurance. According to a White House study this summer, not expanding Medicaid is costing Texas $3-plus billion in federal subsidies this year and up to $10.4 billion by 2017.

Still, most Texas Republicans oppose Medicaid expansion. They say that the program is already bloated and don’t believe the federal government will keep promises to cover 90 percent of the costs the state will incur if it chooses expansion.

A December report by the state Senate Health and Human Services Committee recommended against expanding Medicaid but endorsed seeking a federal waiver to give Texas more flexibility to administer the program.

That’s where renewing the Medicaid waiver could come in. Since Texas and federal negotiators agreed to it in 2011, the waiver has provided more than $29 billion in federal funding meant to streamline Texas’ Medicaid program, much of it going to reimburse hospitals for treatment of uninsured patients.

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Centers for Medicare and Medicaid Services spokesman Aaron Albright dismissed the idea that the federal government might use the expiring wavier to pressure Texas to accept Medicaid expansion, saying via email: “CMS is committed to supporting state flexibility and working with states on innovative solutions that work within the confines of the law.”

In fact, Medicaid waivers allowing broad flexibility have already been granted to Iowa, Michigan, Pennsylvania and Arkansas, and similar agreements are pending state approval in Indiana and New Hampshire. Arkansas was even allowed to use its share of the federal expansion funding to let residents above the poverty line buy private insurance — though the state’s Legislature may not approve funding for the so-called “private option” when it reconvenes this month.

“I think CMS very much wants to make deals,” said Joan Alker executive director at Georgetown University’s Center for Children and Families. “But there are certain lines that can’t be crossed.”

Alker noted that in Florida, another state that hasn’t expanded Medicaid, the government recently granted a one-year waiver to provide federal funding to hospitals, rather than the typical three-year waiver.

A federal block grant idea to create a new insurance plan for Texas’ poor was proposed in 2013 by a bipartisan bill sponsored by Rep. John Zerwas, a Richmond Republican and anesthesiologist. It failed, and Zerwas hasn’t pre-filed similar legislation for 2015, but he said he hopes someone else will.

Abbott, while campaigning for governor, endorsed a block federal grant but provided few details.

Asked recently what he will do as governor to help uninsured Texans, Abbott said only: “I am confident that the Legislature will look at a variety of different issues and approaches.”

(© Copyright 2015 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.)

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