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A Times Editorial

Numbers on Medicaid add up to savings for Florida

Gov. Rick Scott claims to be about crunching the numbers and doing what is right for Florida taxpayers. But the proposed state budget he released Thursday is silent on whether the state should accept the expansion of Medicaid under the health care reform law, and the evidence continues to build that Florida would be foolish to let ideology trump smart policy.

Expanded Medicaid is a good deal for the state. Scott has been trying to make it look like it's not, but the numbers don't lie. A new academic study says the state's public coffers would see a net gain if Medicaid is expanded to provide insurance to potentially a million more Floridians. This contrasts sharply with figures from the Agency for Health Care Administration that put the cost to the state of offering expanded Medicaid at $3 billion over 10 years. An earlier AHCA estimate of $26 billion was shown to be based on political assumptions that the federal government wouldn't follow the law.

According to the Health Policy Institute at Georgetown University, the state should expect an extra $300 million in 2014 when the cost of Medicaid expansion under the Affordable Care Act is covered entirely by the federal government. That windfall is reduced to $100 million in 2020, when the federal contribution dips to 90 percent of the cost. That's still significant, considering that the state also gains health coverage for its poor adult population.

The money would be the result of offsetting savings from state and local medical safety net programs. If a large segment of the uninsured gain coverage, the burden on these programs is reduced. The report estimates large savings from the state's Medically Needy program of up to $250 million a year. Added savings would come from mental health and substance abuse service programs. Medicaid or private insurers would pick up the cost instead.

The U.S. Supreme Court, in upholding the constitutionality of the Affordable Care Act, gave states the option of not participating in expanded Medicaid. Scott initially opposed Florida opting in, but he has softened that stance since hearing from insurers and health care executives. Floridians would be eligible for coverage if they earn up to 133 percent of the federal poverty line ($14,856 for an individual or $25,390 for a family of three). The expansion would provide insurance to an estimated 815,000 to 1.3 million Florida uninsured residents, according to the report.

But if Florida refuses the expansion a cascade of bad things would likely happen: Safety net hospitals would lose federal money under a program that provides funds for uncompensated care. The federal law says $22 billion will be cut from that program from fiscal year 2014 to 2022, a reduction of about 50 percent.

The state would lose an estimate $26 billion in federal money over 10 years that would have gone to hospitals, doctors and other health care providers serving the newly insured Medicaid population. The loss of money translates into lost jobs. A study commissioned by the Florida Hospital Association finds that 56,000 jobs would have been added to the state under the Affordable Care Act.

On the bright side, Scott did not recommend rejecting the Medicaid expansion Thursday. That still leaves a window of opportunity for the governor and the Legislature to do the right thing.

Numbers on Medicaid add up to savings for Florida 01/31/13 Numbers on Medicaid add up to savings for Florida 01/31/13 [Last modified: Thursday, January 31, 2013 6:06pm]

    

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A Times Editorial

Numbers on Medicaid add up to savings for Florida

Gov. Rick Scott claims to be about crunching the numbers and doing what is right for Florida taxpayers. But the proposed state budget he released Thursday is silent on whether the state should accept the expansion of Medicaid under the health care reform law, and the evidence continues to build that Florida would be foolish to let ideology trump smart policy.

Expanded Medicaid is a good deal for the state. Scott has been trying to make it look like it's not, but the numbers don't lie. A new academic study says the state's public coffers would see a net gain if Medicaid is expanded to provide insurance to potentially a million more Floridians. This contrasts sharply with figures from the Agency for Health Care Administration that put the cost to the state of offering expanded Medicaid at $3 billion over 10 years. An earlier AHCA estimate of $26 billion was shown to be based on political assumptions that the federal government wouldn't follow the law.

According to the Health Policy Institute at Georgetown University, the state should expect an extra $300 million in 2014 when the cost of Medicaid expansion under the Affordable Care Act is covered entirely by the federal government. That windfall is reduced to $100 million in 2020, when the federal contribution dips to 90 percent of the cost. That's still significant, considering that the state also gains health coverage for its poor adult population.

The money would be the result of offsetting savings from state and local medical safety net programs. If a large segment of the uninsured gain coverage, the burden on these programs is reduced. The report estimates large savings from the state's Medically Needy program of up to $250 million a year. Added savings would come from mental health and substance abuse service programs. Medicaid or private insurers would pick up the cost instead.

The U.S. Supreme Court, in upholding the constitutionality of the Affordable Care Act, gave states the option of not participating in expanded Medicaid. Scott initially opposed Florida opting in, but he has softened that stance since hearing from insurers and health care executives. Floridians would be eligible for coverage if they earn up to 133 percent of the federal poverty line ($14,856 for an individual or $25,390 for a family of three). The expansion would provide insurance to an estimated 815,000 to 1.3 million Florida uninsured residents, according to the report.

But if Florida refuses the expansion a cascade of bad things would likely happen: Safety net hospitals would lose federal money under a program that provides funds for uncompensated care. The federal law says $22 billion will be cut from that program from fiscal year 2014 to 2022, a reduction of about 50 percent.

The state would lose an estimate $26 billion in federal money over 10 years that would have gone to hospitals, doctors and other health care providers serving the newly insured Medicaid population. The loss of money translates into lost jobs. A study commissioned by the Florida Hospital Association finds that 56,000 jobs would have been added to the state under the Affordable Care Act.

On the bright side, Scott did not recommend rejecting the Medicaid expansion Thursday. That still leaves a window of opportunity for the governor and the Legislature to do the right thing.

Numbers on Medicaid add up to savings for Florida 01/31/13 Numbers on Medicaid add up to savings for Florida 01/31/13 [Last modified: Thursday, January 31, 2013 6:06pm]

    

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