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Can Florida afford to say no to Medicaid expansion?

Medicaid is about to take a starring role in the national health care debate.

Today, only certain people qualify for the health insurance program for the very poor: the elderly, the disabled, pregnant women and children. Under its proposed expansion, any poor American could qualify — a key part of health care reform.

But thanks to the recent U.S. Supreme Court ruling, decisions about expanding Medicaid have been left to the states. And Gov. Rick Scott was the first governor in the land to declare he wouldn't do it.

"There's no way that Floridians can pay for that," he told Fox News host Greta Van Susteren, a day after the law was upheld. "This is an expansion that doesn't make any sense."

Scott's main point is that the state's annual Medicaid expenses already have ballooned to $20 billion — nearly a third of the entire state budget.

But to others — especially health policy experts and the hospitals that treat the uninsured in their emergency rooms — an expansion makes sense.

Consider:

• By most measures, Florida has a thrifty Medicaid program, with a per-person spending rate far below the national average.

• Medicaid spending has gone up primarily because more people have signed up for the program since the beginning of the Great Recession.

• The expansion under the reform law would bring millions in federal dollars to help people who are now uninsured. The federal government foots the entire bill for expanded coverage during the first three years, and 90 percent or more of it until 2020.

In fact, health experts warn that not expanding Medicaid could cost Floridians, because many of the state's 3.8 million uninsured residents will continue to receive care they can't pay for in hospital ERs. Those costs ultimately are passed down in the form of higher insurance premiums for everyone else.

"We have an opportunity here," said Anthony Carvalho, president of the Safety Net Hospital Alliance of Florida, which represents hospitals such as Tampa General, which care for the poorest and sickest patients. "It's a very significant opportunity to bring health coverage, health access to Floridians that don't have it."

• • •

Established in 1965, Medicaid is a program jointly run by federal and state governments that provides free or low-cost health coverage to poor families, children, pregnant women, elderly people and the disabled.

More than 3 million Floridians are enrolled in one of several Medicaid programs. About 70 percent of Medicaid services provide acute care, which includes hospital stays, outpatient procedures and doctor visits. The remaining 30 percent goes to long-term care such as nursing homes and home health services.

Currently, the federal government foots 55 percent of the total Medicaid bill in Florida.

But the state's tab has grown steadily, from about $14.8 billion in 2007 to $20.3 billion this past year, a 37 percent increase.

The growth, however, has been driven largely by enrollment, not rising costs. Enrollment has increased more than 50 percent over the same period, from 2.1 million to about 3.2 million.

"You can't argue that because you're covering more people, that somehow it's out of control," said Bruce Rueben, president of the Florida Hospital Association, which supports the Medicaid expansion.

Florida spends about $4,168 per Medicaid patient, less than the U.S. average of $5,535, according to the Henry J. Kaiser Family Foundation, a leader in health policy analysis. Only three states spend less per Medicaid enrollee — California, Georgia and Alabama.

Under the Affordable Care Act, the Medicaid expansion would allow more than 1 million of Florida's uninsured to qualify for coverage, by raising the income limit for many programs to 133 percent of the Federal Poverty Level, or about $30,000 for a family of four.

Right now, some populations — including young adults and parents — must make no more than 22 percent of the Federal Poverty Level to qualify for coverage. That's $2,457 a year for an individual or $5,071 for a family for four.

Those restrictions have contributed to Florida having the third-highest rate of uninsured residents in the country, said Joan Alker, co-executive director at the Georgetown Public Policy Institute, who has studied Medicaid for years.

But now, "Florida stands to benefit more than most states from the Medicaid expansion because your program has been ungenerous," Alker said.

• • •

Without coverage, many of the state's 3.8 million uninsured residents often forgo needed care or seek care in hospital emergency rooms.

"That's the most expensive form of care," said Jay Wolfson, a health policy expert at the University of South Florida.

And when they leave with hefty bills they can't pay, hospitals end up absorbing large amounts of uncompensated, or "charity" care, which experts say affects Floridians in several ways.

To recoup those costs, hospitals either reduce services or charge higher rates to insurance companies, or both. Those costs are often passed down to businesses that provide insurance for their employees.

"And that is going to end up in your premiums," said Rueben, of the Florida Hospital Association.

Many refer to this as a "hidden tax." Families USA, a nonprofit group based in Washington, D.C., that advocates for quality, affordable health care, estimated that the "hidden tax" added an extra $1,017 to annual family health insurance premiums in 2008, and an additional $368 in individual premiums.

But the arguments for Medicaid expansion go beyond dollars and cents.

"We know from all research that people with insurance tend to be healthier than those" without, Rueben said. "It's not a good thing if they have that opportunity, but it is denied them."

In a recent national poll by the Kaiser Family Foundation, people who had personally been enrolled in Medicaid said overwhelmingly that their experiences with the program were positive.

Rueben and others say Medicaid would give more people access to preventive services such as checkups and screenings and to prescription medications needed to manage chronic illnesses such as diabetes and heart disease.

"When people wait to come to the ER, it's not just a matter of the expensive use of the ER," he said. "They're usually sicker, they've waited longer, and their chances for positive outcomes are reduced."

• • •

But even those who support the expansion acknowledge the governor's concerns and Medicaid's limitations.

Medicaid now makes up almost a third of the entire state budget. Health providers have long complained that Medicaid reimbursements are so low they don't cover the costs of care. And because of low reimbursements, fewer physicians in the state actually accept new Medicaid patients.

Dr. Robert Brooks, associate vice president for health care leadership at USF, points to the story of former state Rep. Ed Homan, an orthopedic surgeon from Tampa, who once said he sees Medicaid patients from as far away as Jacksonville because they can't get seen closer to home.

"My point is just expanding the number of people in a dysfunctional system doesn't necessarily result in the quality outcomes we'd like to see," Brooks said.

Brooks also said that while the federal government is picking up the bill for expansion in the first three years, "expanding Medicaid coverage will result in an ongoing obligation of the state for many years to come."

And Scott told Van Susteren it's also possible that the federal government won't deliver on its promise to cover the bulk of the expansion.

"Look, every government program in the world, they say, "I'm going to cover everything.' They run out of money. They're not honest …," he said. "And then there's no one to take care of you. That's exactly what this will do."

Scott repeated his concerns about spending when asked on Friday about expanding Medicaid.

"Your state budget is primarily tied to education, corrections and health care, which is primarily Medicaid," he said. "Ultimately it ends up being a choice between education and health care."

Scott also said government programs run out of money and should not be used to provide health insurance.

"My focus is, if you get people back to work, they'll be able to afford their own health care," Scott said.

Whether Scott's "no" to an expanded Medicaid program is the last word remains to be seen. Though hardly fans of the federal health care law, state legislators weren't as emphatic after the Supreme Court ruling, and they also get a say in the decisionmaking.

State Sen. Joe Negron, R-Stuart, who chairs the Senate committee that oversees health care spending, said the Legislature is studying Medicaid expansion and will consider the issue next year.

He acknowledges the cost-shifting that happens when the uninsured get treated in ERs, but is concerned about expanding the program, especially when the federal government can ramp back its contributions in later years.

"My goal is, we explore market-driven ways to make sure that more Floridians have affordable health insurance,'' he said.

It's worth noting that the original Medicaid program wasn't accepted by all states when it first began. Today, every state participates. If Scott and the current Legislature don't approve an expansion, it's possible that future leaders might not be so opposed — and that will keep the debate over Medicaid going for years to come.

Carvalho said the safety-net hospitals believe that expanding Medicaid is the most realistic way of covering a very poor population. There just aren't many other options on the table.

"Saying no to the opportunities afforded in the act, in the Medicaid expansion, is no solution," he said. "No solution to the people who would receive coverage, and no solution in that Florida would then be subsidizing other states that took advantage of it.

"The Affordable Care Act is not a perfect solution. Medicaid is not a perfect program. But it does provide a major step to providing coverage to those uninsured in the state. We support that, absent other alternatives."

Times staff writers Charlotte Sutton and Lee Logan contributed to this report. Richard Martin can be reached at rmartin@tampabay.com. Angie Drobnic Holan can be reached at aholan@tampabay.com.

Medicaid in Florida

A closer look at how the state administers Medicaid. 6A

Can Florida afford to say no to Medicaid expansion? 07/20/12 [Last modified: Saturday, July 21, 2012 11:42pm]

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