1. Health

Florida can save millions by accepting federal Medicaid funds, state agency says

Published Apr. 13, 2013

State lawmakers may have overlooked more than $430 million in yearly savings for Florida taxpayers by not accepting the federal dollars promised through the Affordable Care Act.

The savings, says the Medicaid director at Florida's Agency for Health Care Administration, come from the administration's recent pledge to pay the full cost of "Medically Needy" recipients annually. These are patients with serious illnesses who cannot pay for their treatment.

Last month, when state budget analysts studied the cost-benefit of expanding Medicaid to cover 1 million low-income uninsured Floridians, they had to leave out savings from "Medically Needy" because they didn't know whether federal health officials would offer full funding for that program.

AHCA released the report this week to Health News Florida on request. In a telephone interview, Florida Medicaid director Justin Senior said he received the news about the full funding for Medically Needy on Wednesday. He declined to name the high-ranking federal official.

In the current contentious legislative health care debate, news of the savings might appear to be a game-changer. But it isn't clear whether there is time to digest the information, with just three weeks remaining in the session, or whether it will matter.

The House and Senate are currently in a standoff over whether to accept federal funding. State Sen. Joe Negron's plan, called Healthy Florida, would accept the federal funds, but use them to subsidize private coverage for more than 1 million uninsured low-income Floridians. President Barack Obama's administration has hinted that it would accept that substitution.

But the House does not want to accept the federal funds, which legislative budget analysts estimate would amount to more than $50 billion over a decade. The first three years of expanded coverage would be fully federally funded under the health law, and then the state would be expected to kick in a small percentage, peaking at 10 percent in 2020.

The savings would more than cover the first decade of Medicaid expansion under the Affordable Care Act, says Amy Baker, director of the Florida Legislature's Economic & Demographic Research Office.

If AHCA and Baker are correct, it would actually cost state taxpayers less to cover 1 million uninsured low-income Floridians than it would to leave them uninsured. And it would cost a lot less than the House plan released on Thursday, which would provide coverage to many fewer people: about 115,000.

House Speaker Will Weatherford, R-Wesley Chapel, has said he doesn't trust the federal government to keep its commitment because of the need for budget cuts in Washington.

The House plan was developed by another Rep. Richard Corcoran, R-Land O'Lakes. His Florida Healthy Choices plan offered a list of reasons why Medicaid is not a good program and says those enrolled are deprived of their freedom.

So, how could so much money be saved by eliminating the necessity for "Medically Needy?" State records show Florida pays 42 percent of the cost for the program, more than $430 million a year out of state general revenue.

If Florida agreed to accept federal Medicaid expansion funds, the adults who are currently in Medically Needy would be covered by private subsidized insurance, either through Negron's plan or the federal health exchange. Children who are in the "Medically Needy" program would remain there, according to the AHCA report.