The Buzz

From the staff of the Tampa Bay Times

Business coalitions warn that failure to expand Medicaid will hurt them

19

June

Two business-backed health insurance coalitions sent a warning signal Wednesday to Florida’s employers about the effects of rejecting Medicaid expansion for the uninsured.

In a nutshell: brace yourselves, this is bad for business.

They argue that if lawmakers continue to turn away an estimated $51 billion in federal money to pay for expanding Medicaid coverage, companies will restrict growth, businesses will flee to states with more competitive health insurance markets, and any company left standing that pays for health insurance will see its premiums rise as hospitals and doctors shift their losses from the uninsured to them. 

“It will further the upward pressure of the cost shift to the commercially-insured patients,’’ said William Kramer, health care policy expert from the Pacific Business Group on Health in a conference call with reporters. The coalition represents large businesses in 50 states -- from Walt Disney Company, Target, Walmart and Boeing to Wells Fargo. 

In other words, health care reform won't reduce costs for employers and employees in Florida, it will increase costs, they said.

The message from Kramer and Karen van Caulil, President of the Florida Health Care Coalition which represents some of the state’s largest businesses covering two million people, didn’t get through during the legislative session. Legislators adjourned without taking any action on drawing down the federal Medicaid money. They still have until Jan. 14, 2014, to decide. 

Meanwhile, House Speaker Will Weatherford and Senate President Don Gaetz have been touring the state for post-session town hall meetings and have said they have no plans to address Medicaid expansion soon. 

“It’s really frustrating to see there hasn’t been any discussion,’’ said van Caulil in an conference call with reporters Wednesday, organized by the League of Women Voters.

Kramer said that large employers want states such as Florida to accept the federal offer that allows them to expand Medicaid coverage up to 138 percent of the poverty level in order to cover more patients. The business groups said they are ramping up efforts to get the word out in time to persuade legislators to change course. 

The reason: 70 percent of the uninsured in Florida will not be eligible for health care coverage under the federal health insurance exchange. When those people need health care, they’ll end up in the emergency room and receive the most expensive care with no means of paying for it. To cover the cost, hospitals and doctors will shift the cost of that uncompensated care by pressuring health care insurance plans to raise their costs.

Under the current system, 30 cents for every premium dollar paid large employers – and their employees -- covers the cost of uncompensated care, Kramer said. Most of the rest of the uncovered costs are paid for with federal dollars.

The Affordable Care Act assumed that all states would expand Medicaid rolls and the number of uninsured would shrink, Kramer said, so the federal government is phasing out the funds for uncompensated care.

“The expansion of Medicaid has the potential to reduce that cost shift,’’ he said. “Those people who were previously uninsured will be covered by Medicaid. It may not recover all of their costs, but it will recover most of their costs.”

That will work in 24 states that are moving forward with plans to expand Medicaid, Kramer said. But in 20 states, including Florida, that have rejected Medicaid expansion, the cost of uncompensated care won’t shrink and the cost will be borne by large employers. Instead of reducing the costs of health insurance, in Florida, health care reform will lead to increased costs of health care for large employers, he said.

So while the Affordable Care Act was designed to reduce the cost of health insurance by insuring more people, in states that reject Medicaid expansion, Kramer warned, the opposite will happen.

"For most businesses this is not a political issue,'' he said. "Most businesses are very pragmatic. They are very concerned that if Medicaid is not expanded there will be this continuing cost shift to employers and employees."

Meanwhile van Caulil, whose coalition includes large employers such as Disney, Universal, Lockheed Martin and Florida Power & Light, said her organization is gathering data to tell legislators what the impact will be on Florida employers.

She acknowledged that she understands the argument that Medicaid is not perfect. “I understand the concerns the Legislature has to expanding Medicaid,’’ she said. But businesses have been in a “wait and see mentality” for nearly two years. “It’s the law of the land and this wait and see approach isn’t working.”

She believes most businesses have reached the conclusion that it’s time to “expand coverage and if the health of the community is better eventually, it will work out.”

The Florida Health Care Coalition is gearing up to conduct a November summit and “educate” legislators in an effort to persuade them to expand Medicaid by the January 2014 deadline.

“Expanding Medicaid is good for industry,'' Caulil said. "It’s good for providers. It’s good for Florida’s economy and it’s good for the state budget.’’  

[Last modified: Wednesday, June 19, 2013 7:24pm]

    

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