Pinellas and Hillsborough taxpayers are about to be punished for making an extra effort to help cover health care costs for the poor. Instead of allowing the counties making those local investments to continue to receive the full benefit, the state is poised to divert millions to other counties that were not as generous with their local tax money. It sounds noble to spread the money to hospitals throughout the state, but it is unfair to local taxpayers, and Florida could wind up losing federal health care money in the end.
A 2011 state law involving Medicaid and matching federal dollars is responsible for this latest fight between counties that have invested in health care for the poor and counties that have not. In the past, local governments that taxed themselves to help pay for health care for the poor sent their money to one account, where it was matched with federal dollars. The money was then returned to hospitals in the counties that sent the money. That seems only fair.
But now a portion of the 2011 law that takes effect in July changes that arrangement. It would require $1 billion in federal matching money to be spread around every corner of the state, including places that never contributed a dime in the first place. Local governments such as Pinellas and Hillsborough would receive what they put into the joint account, plus interest. But the remaining money would be divided among hospitals throughout Florida in a complicated formula that breaks hospitals into tiers based upon characteristics such as location and the number of Medicaid patients.
The cost of the new formula to Hillsborough, which levies a half-cent sales tax for indigent care, and Pinellas, where the government pays money from the county's general fund budget: $133 million. Hospitals in South Florida, including those in Miami-Dade where $218 million is at stake, risk losing even more. If that's not bad enough, there could be other unintended consequences. Local governments could stop raising local revenue for health care, or they could stop sending their local money to the joint account for the matching money. That would cost the state millions more in federal matching money.
The 2011 law that spreads the matching money around the entire state and rewards those areas that have not invested in health care for the poor fails the fairness test. It penalizes counties that have paid into the system by withholding their full reward and it gives money to hospitals that haven't earned it and, in some cases, serve very few Medicaid patients. Lawmakers owe it to Floridians to change the rules before they take effect this summer.