HNF Stories
12:08 pm
Tue May 14, 2013

Health Experts on Medicaid Rejection: 'Bad for Business'

The Florida Legislature’s decision against expanding Medicaid will saddle the state’s employers with higher health care costs and was “bad for business,” health care experts told business leaders on Tuesday. 

Florida corporations have been “too quiet” about Medicaid expansion and other health care issues, and should make elected officials aware of their displeasure before the damage gets worse, said William Kramer, a national health policy leader in San Francisco who works with corporations.

“If Medicaid is not expanded, it’s going to raise the premiums employers pay for health coverage, because hospitals will raise the costs they charge,” Kramer said. “Businesses have to speak up. They don’t have to do it in a political way, they just have to say it’s bad for business. It’s bad for employees, too, because the more money that goes for health benefits, the less that is available for wages.”

Kramer, a director at the policy and advocacy organization Pacific Business Group on Health, was the keynote speaker at a seminar in Boca Raton targeting company executives. The sponsor was the employer-oriented Florida Health Care Coalition, based in Orlando.

Gov. Rick Scott and the state Senate favored expanding Medicaid to extend health coverage to more than 1 million uninsured, low-income Floridians. Virtually all the costs would be covered by $51 billion in federal funds over 10 years from the Affordable Care Act passed by Congress in 2010. But state House leaders would not go along, in opposition to so-called “Obamacare.”

There’s no question the decision will hurt employers, coalition President Karen van Caulil said. Just last week, hospital leaders told her that without expansion, they would cover the medical bills of uninsured patients by raising fees for patients with insurance, most of whom are covered at work. That will translate to increased premiums for employers, she said.

“Here we go with yet another financial hit for providing health insurance coverage for employees,” van Caulil said. Some employers will absorb the hit; some may choose to make more employees part-time so they won’t have to offer health coverage, and a few may drop employee health benefits despite penalties they would have to pay under Obamacare.

“Where are they going to get that incremental money?” van Caulil said. “We have to go back to the Legislature to express our concerns. We’re so concerned about what’s happened with Medicaid. We want health care reform to work.”

Florida is far from alone in rejecting Medicaid expansion. As many as 26 states controlled by Republican lawmakers are likely to do the same, an outcome that van Caulil and Kramer said would undercut the Affordable Care Act. The law aimed to cover most of the nation’s estimated 45 million uninsured Americans, primarily by extending Medicaid to those earning up to 138 percent of the federal poverty level ($26,951 for a family of three).

Without Medicaid expansion, those 1 million Floridians will continue to receive care in emergency rooms on a haphazard basis, said Carl Patten of the Florida Blue Center for Health Policy.

“They get bad, expensive care that is uncoordinated and less effective,” Patten said.

The Supreme Court upheld the law last summer, but weakened its cost-control powers by allowing states to opt out of expanding Medicaid, Kramer said. His group encourages health insurers to control costs by eliminating unnecessary procedures and duplicative payments to providers. Now employers must push harder for Medicaid expansion, he said.

"I can understand why conservative legislators may oppose Obamacare,” Kramer said. “But they may not be able to connect the dots and see the negative impact of their actions on the business community. It’s incumbent on the business community to help them connect the dots.” 

--Bob LaMendola is a free-lance health reporter based in South Florida. Please send question or comments to lottiewatts@wusf.org