Gov. Rick Perry has a long history of rejecting federal funds that come with strings attached, arguing that they undermine state sovereignty. He's demanded that Washington transfer the money and let the states decide how best to spend it.

The Affordable Care Act "essentially treats the states like subcontractors through which the federal government can control the insurance markets and pursue federal priorities rather than those of the individual states," Perry said in a letter to Kathleen Sebelius, the secretary of U.S. Health and Human Services, announcing he would not expand Medicaid or start a health insurance exchange to help people buy health insurance.

Like most Texas Republicans, Perry believes in limited government and has called for the state to keep spending flat. Conservative activists have formed a chorus threatening to oust politicians who talk about raising government spending, and several Republican incumbents in the Texas House, including three powerful committee chairs, lost primary challenges to tea party activists who promise a strict no-new-spending ideology.

Perry's position is rooted in philosophy, but also serves a political purpose. He is raising money to run for a fourth term as governor while holding out the possibility he will run again for president, as early as 2016 if President Barack Obama is re-elected in November. Opposing the Affordable Care Act burnishes his conservative credentials, which is reflected in his office's rhetoric.

"Attempting to expand it at any rate would be absolutely absurd and irresponsible, chipping away at other essential state programs like education and public safety," Perry spokeswoman Catherine Frazier said after the reduced cost estimates were announced. "The governor's focus remains on fully repealing Obamacare."

Perry and his fellow Republicans, who hold every statewide office and control both chambers of the Legislature, are unlikely to expand the state's Medicaid program. But that doesn't mean programs that provide health care for the poorest people are not facing a crisis.

State officials estimate more than 24 percent of Texas residents are not enrolled in any form of health insurance or government program, the highest rate in the nation. Texas has one of the strictest Medicaid programs in the country, barring single adults from the program completely and setting an income limit of $2,256 a year for families of three. Poor children, the disabled and the impoverished elderly comprise most of the program.

To balance the state's budget without raising taxes, Texas lawmakers have slashed how much they reimburse doctors to the point where nearly 70 percent of doctors are not accepting new Medicaid patients. Hospitals that treat the poor complain that the program to help them pay for treating Medicaid patients and the indigent will soon bankrupt them because the state's payments don't cover the actual costs.

Lawmakers shorted the Medicaid program $4.8 billion in the current budget, and they will need to make up the shortfall when they meet again next year. Based solely on population growth and inflation, the program will likely grow by another $5 billion in the next budget, Suehs has said.

Democrats have called on the Legislature to tap the state's Rainy Day Fund and to close tax loopholes, two steps that would boost state spending. If Republicans stick to their ideological guns, they will need to make even more budget cuts, with public education the largest chunk of state spending.