No Medicaid Expansion…Now What?

Healthcare Policy

BREVARD COUNTY • MERRITT ISLAND, FLORIDA–In mid-February, when Florida Governor Rick Scott made the surprising announcement that he would support one of the key elements of the Patient Protection and Affordable Care Act (PPACA)—expansion of Medicaid (MA) healthcare coverage to approximately 900 thousand uninsured Floridians—hopes rose among the strong proponents of MA expansion, which notably includes Democrats, the Florida Hospital Association and the Florida Chamber of Commerce, that there might be a chance that the legislature would approve MA expansion during this legislative session.

Governor Scott’s endorsement of expansion came on the heals of a report by Florida’s chief economist concluding that “Florida could not afford not to expand [Medicaid],” and with the caveat that MA expansion approval be reversed if the federal government reneged on its offer of 100% funding of the first three years and that the approval “sunset” in three years requiring a legislative renewal to proceed thereafter.

Both House And Senate Reject Medicaid Expansion

However, over the past weeks, for a variety of complex and controversial reasons, both the Florida House and Senate Select Committees on the PPACA voted, along party lines, not to approve expansion of the MA program as prescribed in the PPACA.

The expansion under consideration would provide MA coverage to those with incomes of 138 percent of federal poverty level or less—about $15 thousand a year for an individual and $30 thousand for a family of four.  However, the majority of those projected for coverage are adults who currently don’t qualify because they don’t have children.

Legislature Lacks Confidence In Federal Economy

Economic forecasts put total state PPACA implementation costs at $5.2 billion over the next ten years, which includes, if approved, $3.5 billion to expand MA. According to PPACA provisions, the federal government would fund most of that $3.5 billion. However, it is the legislature’s lack of confidence in reliable federal funding of such programs well into the future that has nailed the coffin shut on approval.

According to the MA expansion provisions of the PPACA, which the Supreme Court ruled cannot be mandatory but must be a voluntary decision by each state, the federal percentage of the cost of coverage will begin to drop in 2017 from 100 percent in 2014-2016 until it reaches 90 percent in 2022 and remain at that level.

Republicans in both houses clearly articulated their skepticism that the federal government is capable of reliably coming through over the long haul with the funding, sighting the overwhelming budgetary challenges in Washington D.C. and the precarious state of our economy.

Proponents of MA expansion rebut the Republican concerns by referring to the fact that, since its inception, MA funding has been very reliable and stable at between 55-59%, which includes a brief bump up to 68% due to the American Recovery and Reinvestment Act–stimulus package–in February of 2009, which included a deliberate and temporary boost to MA federal matching rates for the states.

Rejection Of Medicaid Expansion Will Impact Private Sector

Chief State Economist, Amy Baker, advocated for expansion approval and, in joint session, told both committees that the federal funds for MA expansion would appreciably help to offset other costs associated with the implementation of the PPACA, which would otherwise fall on the private sector.

Mandatory elements of the PPACA, including requirements that individual and large businesses carry insurance or pay penalties, takes effect regardless of the legislative decision on expansion.  Legislators advocating for expansion say that Florida employers stand to lose $6-12 billion a year over the next 10 years if almost one million low-income people who would have been covered by the new federal funds are left uninsured.

Don’t Kick The Can Down The Road…

Over four million Floridians, 21.4 percent of our state population, are uninsured.  It is clear that the political dynamics of the PPACA and the staunch party-line positions and opinions are going to prevent MA expansion as structured in “Obamacare.”

The question we must be asking our governor, senators and representatives is, “Can you collectively, and for the greater good of the people of Florida, rise above the entrenched bipartisanism so typical of federal politics and work together on an alternative plan to effectively provide healthcare coverage for qualified uninsured citizens of this state?”

…Find A Solution

Perhaps the good news is that, although the Florida legislature’s rejection of MA expansion is a setback to expansion efforts, the body left room for a possible compromise to emerge.  Based in part on their premise that MA coverage is far inferior to private insurance products and programs, the Select Senate Committee proposed to accept the federal money as provided in the PPACA, but use it to place qualified low-income Floridians into private insurance plans.

Similar compromises in Arkansas and Ohio have been proposed, could make MA expansion more appealing to conservatives and thus help the Obama Administration convince hold-out states to create a program that effectively maximizes coverage of the qualified uninsured.

It’s a gross understatement to say, “None of this is easy.”  It is extremely difficult, and requires a committed approach to solutions and a healthcare coverage program structure designed collaboratively and with a focus on how to best meet the needs of all Floridians.  Make it known to your legislative representatives and the governor what you expect of them.

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