1. Health

Florida hospitals could lose billions without Medicaid expansion, group warns

Published Nov. 13, 2014

MIAMI — Florida legislators' refusal to expand the eligibility criteria for Medicaid as called for under the Affordable Care Act might cost billions of dollars in lost funding for hospitals that treat many uninsured patients, according to a report by Florida Legal Services, a nonprofit legal advocate for the poor.

The financial impact would be felt most acutely by so-called "safety net" hospitals such as Tampa General Hospital. The biggest loser could be taxpayer-owned Jackson Health System, according to Florida Legal, which estimated Jackson could lose more than $570 million a year.

But if state legislators were to accept the government's offer to spend about $5 billion a year to expand Medicaid to an estimated 760,000 more Floridians, the new revenue would more than offset the anticipated loss of federal funding for hospitals that treat many uninsured patients, Florida Legal reports.

Miriam Harmatz, a senior attorney with Florida Legal and a co-author of the report, said Florida has an estimated 760,000 residents in the coverage gap, which means they are not eligible for Medicaid and they do not earn enough income to qualify for government financial aid to buy private health insurance on the government-run exchange.

"The Legislature has a chance to address that," she said.

The anticipated funding cuts derive from a series of agreements between Florida and the federal government, and the intent of President Barack Obama's health care reform law, which had anticipated that more Americans would have access to insurance under the ACA, reducing the amount of uncompensated care delivered by hospitals.

The health care law calls for gradual reductions in certain payments known as Disproportionate Share Hospital (DSH) program funds. In 2014, Florida hospitals will receive almost $240 million in DSH funding, which the state then distributes according to a formula.

But the biggest loss stems from a July 2014 agreement between Florida and the Centers for Medicare and Medicaid Services, which administers the health care programs on the federal level.

That agreement calls for the elimination of about $1.8 billion a year in statewide funding through the Low Income Pool program (LIP) starting on June 30.

The federal funding cuts are scheduled to occur regardless of the Florida Legislature's actions on Medicaid, according to Florida Legal's report.