1. Florida Politics

Legislature's inaction on Medicaid reform comes at a price

U.S. Rep. Debbie Wasserman Schultz, who was in Tallahassee on Wednesday, criticized Gov. Rick Scott for not pushing House Republicans to pass Medicaid expansion.
U.S. Rep. Debbie Wasserman Schultz, who was in Tallahassee on Wednesday, criticized Gov. Rick Scott for not pushing House Republicans to pass Medicaid expansion.
Published May 9, 2013

TALLAHASSEE — Republican lawmakers say they are champions for Florida's businesses.

But their failure to expand health insurance coverage to 1 million or more Floridians will put many employers in a financial lurch.

Without a deal on health care, business owners across the state face the predicament of either paying to provide health insurance for their employees or facing federal government fines. Either way, the Legislature's inaction will saddle many businesses with additional costs that could reach, in total, close to $150 million next year.

"If you do not do Medicaid expansion, or something similar to that, there is a very real penalty imposed upon the employers of the state of Florida," said Sen. David Simmons, R-Altamonte Springs, who had pushed some compromise.

It's only one wrinkle from legislative inertia.

In another, non-U.S. citizens living legally in Florida will be eligible for subsidized health insurance while some poor U.S. citizens will get nothing.

Florida businesses have long complained about the confusion and uncertainty surrounding the 2010 health care law. The Legislature's failure to reach a compromise on Medicaid expansion just adds another layer.

The historic U.S. Supreme Court ruling upholding the law actually created some of the current problems. While justices ruled that the centerpiece of the law — a requirement that most everyone have health insurance — was constitutional, they struck down a provision that would have essentially required states to expand Medicaid.

By giving states a choice whether to expand, the court created loopholes about who would be covered and how, and who would be left out.

Part of the law that remained in place requires businesses with more than 50 full-time employees to provide health insurance coverage to anyone working more than 30 hours a week. Many people in agriculture, tourism and hospitality would have been eligible for an expanded Medicaid program.

But with no Medicaid expansion, those workers must either get health insurance from their employers, or they can turn to a federal health exchange to purchase insurance.

If they use a federal exchange, their bosses will be penalized.

And the fines are steep.

In Florida, about 400,000 people who would have qualified for Medicaid expansion are eligible to purchase insurance on exchanges.

If just one employee goes on the exchange, business owners are required to pay a fine of $2,000 for each of their full-time employees (minus the first 30). In a company of 200, that could translate into a fine of $340,000.

In total, Florida employers could face at least $145.7 million in federal penalties per year, according to tax preparation service Jackson Hewitt.

The eye-popping number is why business groups joined Democrats and Senate Republicans in pushing to accept federal Medicaid money.

Expanding Medicaid alleviates "additional costs on our businesses," said Associated Industries of Florida general counsel Tammy Perdue.

The quirk about health care for U.S. citizens and non-U.S. citizens is another result of the Supreme Court's bifurcated decision, and one that could have significant consequences in Florida.

Congress created two different systems for people living below the poverty line. U.S. citizens would receive Medicaid through the expansion. Non-U.S. citizens would be eligible for subsidized private insurance.

The idea was to avoid dragging immigration politics into the health care debate. But while states can opt out of the Medicaid expansion, they cannot change the rules for non-U.S. citizens. As a result, some non-U.S. citizens will be better off.

Lawmakers in Florida are far from the only ones to have failed to reach a health care agreement. Nine other southern states have said they will not expand Medicaid coverage. Wyoming, South Dakota, Nebraska, Pennsylvania and Alaska also appear ready to reject federal health care assistance. Another dozen or so states are still weighing their options.

Leaders in many of those states say the 2010 law leaves little flexibility to pursue a plan that fits their needs.

In Florida's case, House Republicans were particularly hesitant to accept the federal funding or provide subsidized health care to single, childless adults. They came up with a plan of their own, relying on solely state money, that did neither.

Some Republican lawmakers went as far as to characterize childless adults as people who could get insurance, if only they weren't so lazy. Rep. Matt Gaetz, R-Fort Walton Beach, said the group was too busy playing a Grand Theft Auto video game to get a job. His father, Senate President Don Gaetz, R-Niceville, said he had little concern for "somebody who is an adult and chooses to sit on the couch."

While the federal government has been willing to discuss how states provide health care, they have yet to budge on who is eligible. The health care law says that all people who make less than 138 percent of the federal poverty level — about $16,000 for a single person — should receive subsidized insurance coverage.

The plan offered by House Republicans purposely did not cover the 400,000 people who make between 100 and 138 percent of poverty, noting that they would be eligible to purchase insurance on exchanges.

Not said by lawmakers: the potential hit to businesses.

It's unclear what will happen next. Senate leaders, who are willing to accept federal money, say they will continue to work on a compromise that House Republicans might stomach.

Gov. Rick Scott, meanwhile, could force lawmakers to return to Tallahassee for a special session. Or lawmakers could try again in 2014.

Karen Woodall, director of the left-leaning Florida Center for Economic and Fiscal Policy, believes the reaction of Florida businesses will push GOP lawmakers to get something done sooner than later.

"That gives me some comfort level that there will be a special session," she said. "If it were just poor people getting health coverage, I don't know if the state would ever act."


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