Business coalitions warn Florida's failure to expand Medicaid will hurt them

Two coalitions say turning away $51 billion in federal money makes the state unappealing to employers.
Published June 19 2013
Updated June 19 2013

TALLAHASSEE — 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 losses to them.

"It will further the upward pressure of the cost shift to the commercially insured patients,'' said Bill 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 — including the Walt Disney Co., Target, Walmart, Boeing and Wells Fargo. In other words, health care reform won't reduce costs for employers and employees in Florida; instead, it will increases costs, they said.

Florida lawmakers adjourned in early May without taking action on drawing down the federal Medicaid money. They have until Jan. 14 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 Karen van Caulil, president of the Florida Health Care Coalition, which represents some of the state's largest businesses, in a conference call organized by the League of Women Voters.

Kramer said large employers want states such as Florida to accept the federal offer and that business groups are ramping up efforts to get the word out in time to persuade legislators to change course.

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.

That will work in the 24 states that are moving forward with plans to expand Medicaid, Kramer said. But in the 20 states, including Florida, that have rejected Medicaid expansion, the cost of uncompensated care won't shrink and will be borne by large employers.

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 said, the opposite will happen.

"For most business, 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."