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Study: Medicaid expansion may save Florida money

Published Jan. 31, 2013

Florida would save money over the next decade — not lose billions as Gov. Rick Scott has argued — by accepting Medicaid expansion under federal health care reforms, according to a detailed economic study.

Miami-Dade legislators and health care industry leaders, getting together on Monday, heard about the report by Georgetown University — the most positive yet on a highly debated provision of what is often called Obama-care.

Jack Hoadley, a senior researcher with the Georgetown Health Policy Institute, said the study was the first to calculate spinoff savings in other state programs if Florida accepted the expansion, which over the next 10 years could bring $26 billion in federal funds to provide insurance to an estimated 815,000 to 1.3 million Florida residents who are now uninsured.

That reduction in the uninsured would bring huge relief to hospitals, which by federal law must treat anyone who comes to the emergency room, regardless of ability to pay.

The top-level meeting, at the United Way of Miami-Dade headquarters, was convened by United Way, Health Council of South Florida and Health Foundation of South Florida.

At the very least, the Georgetown findings and other recent analyses have some critics reconsidering opposition to the 2010 Affordable Health Care Act.

State Sen. Rene Garcia, R-Hialeah, who previously was an "absolute no" vote against Medicaid expansion, said after the meeting that he was now "open to the thought" that expansion makes sense.

State Rep. Eddy Gonzalez, R-Hialeah, said he was still concerned about the debt-ridden feds' ability to fund Medicaid over the long term, but "we are looking at all the options."

Estimates about the real costs of expansion have varied wildly based on the law, which requires the federal government to pay all costs of the expansion for the first three years. Starting in 2017, the state will start paying a small share, which will reach 10 percent of the expansion costs for 2020 and beyond.

Scott, who has long been critical of Obamacare, contended in December that expansion would cost Florida taxpayers more than $26 billion over 10 years. Opponents and health care experts criticized that estimate as way too high, and earlier this month the state's Agency for Health Care Administration gave a much lower estimate of $3 billion for the decade.

That was lower even than a report by the Kaiser Commission on Medicaid and the Uninsured, a Washington research group, which in November estimated that expansion would cover an additional 1.2 million residents at a cost to the state of $5.4 billion over 10 years.

Georgetown's Hoadley said Monday that the Kaiser study used only rough data for all 50 states, while the Georgetown study, funded by two Florida nonprofit foundations, looked in detail at how Medicaid expansion would save money in other areas. The Georgetown study found that the state would have to spend less for safety-net hospitals, mental health and substance-abuse programs and the medically needy program.

Hoadley said the savings calculations were "a very cautious estimate."

The Georgetown report projected that the state would save $300 million in 2014, the first year of Medicaid expansion, and $100 million in 2020, when the state would be paying for 10 percent of the expansion costs.

The Georgetown study found that expansion was especially important in Florida, where almost one in three — 30 percent — of nonelderly adults are uninsured, compared with 18 percent nationwide.

A study done for the Florida Hospital Association estimated that the infusion of federal funds from Obamacare would add 56,000 jobs to the state.

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