I'm sure there are lots of apps that do, though the original question ("can Google Now do it?") appears to be a disappointing "no" for right now.
Skyvi seems to do a pretty good job, though from my limited experience it's kind of annoying (You have to tap the message to have it read it out loud, you have to hit a button to reply, and you can never get a text message in the background of anything, because it always pops up in front of whatever you're doing to give you those options; AFAICT you have to reply or mark it as read *right away* to get it out of your face.) When you want to use your phone primarily for listening to text messages read to you and replying by speech-to-text, though, it's pretty neat. (Though I wish the text to speech could insert capitalization or punctuation, too, but so far I haven't seen any of either.)