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DISTORTIONS ON MEDICAID

Critics of health care reform such as Attorney General Bill McCollum need to quit claiming that it will overburden state finances by opening Medicaid to a flood of new poor and low-income recipients. A recent study confirms the federal government will absorb nearly all of the cost of expanded Medicaid while giving Florida the benefit of sharply reducing the number of uninsured low-income adults and bringing an influx of billions of dollars in new federal spending.

Leading a multistate effort, McCollum has filed a lawsuit to upend the new health care reform law. Part of his argument is that the law "infringes on Florida's constitutional status as a sovereign,'' by requiring the state to expand Medicaid eligibility to people and families with incomes less than 133 percent of poverty. The suit says that Medicaid could require the state to cover 1.7 million new Floridians at a cost to the state of up to $1.6 billion in 2019.

But a report by the Kaiser Commission on Medicaid and the Uninsured offers a very different perspective, one that shows what a boon health reform is to states like Florida. The study predicts that by 2019 Florida Medicaid will cover 951,000 previously ineligible people, including nearly 700,000 who would not have had insurance otherwise. That translates into a reduction by more than 44 percent of the number of low-income adults in Florida without health coverage. Yet the cost of this will be almost entirely borne by the federal government. Florida is estimated to pay only 1.9 percent, or $1.2 billion over six years.

When other variables are included, Florida is likely to come out financially ahead. The financial support counties provide for public hospitals caring for the uninsured won't be needed to the same extent after 2014, when the new Medicaid eligibility rules take effect. A program known as the Florida Low Income Pool that collects funds from local governments to support care for the uninsured and under-insured by hospitals, health centers and county health departments also may no longer be necessary.

McCollum also conveniently ignores how the influx of billions of new federal dollars into Florida's health care system - hospitals, doctors, medical equipment retailers and pharmacies - will be an economic shot in the arm, increasing tax revenues for the state.

Now Florida and the federal government share the cost of Medicaid. Under health care reform, the federal government will shoulder 100 percent of the cost for newly eligible enrollees through 2016. The match then gradually drops to 90 percent in 2020 and stays there. On average, the study found that the increase in state spending nationally will be only 1.4 percent.

This is a tremendous bargain for Florida and it will greatly serve the state's poorest people by providing them with health coverage most would have to otherwise go without. McCollum's claims that the costs will cripple Florida's finances just don't hold up.

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