HNF Stories
8:34 am
Mon March 4, 2013

House Panel Rejects Medicaid Expansion

Only a few hours after Florida's chief economist said the state can't afford to leave billions of federal dollars sitting on the table, the House committee on the Affordable Care Act voted to do exactly that.

Rep. Matt Hudson of Naples.

  The vote fell along party lines, as the Republicans on the committee said they didn't trust the federal government to come through with the money, given the state of the federal budget.  They also expressed an extreme distaste for the Medicaid program, saying it's far inferior to private insurance.

A Senate committee studying the same issues has not yet voted, but the chairman, Sen. Joe Negron, sounded as though he is leaning toward voting for the expansion.

And a lobbyist for Associated Industries of Florida, the state's largest business lobby, spoke in favor of the expansion. AIF had remained neutral until now.

Here are the details:

Amy Baker, coordinator of the Legislative Office of Economic and Demographic Research,  laid out several scenarios on cost-benefit of Medicaid expansion based on different assumptions. But they all pointed in the same direction: Florida cannot afford NOT to expand Medicaid, she said.

That's because the $26 billion in federal funds that Florida is expected to get if it says yes to Medicaid expansion would offset the costs of implementing the mandatory parts of the Affordable Care Act, Baker said. Most of those mandatory costs would fall on the private sector, she said.

“Expansion helps…by mitigating the effects of the mandatory provisions of the law,” Baker said.

The Senate committee’s numbers man, Orlando-area Republican David Simmons, told Baker that her estimates “make sense.” He had already figured out that the state’s employers would be hit if Florida doesn’t accept the federal funds that are being offered, he said.

“The burden on employers if we do NOT do Medicaid expansion is going to be significant,” he said.

Baker estimated that Florida would lose between $6 billion and $12 billion a year over the next 10 years if it says no to Medicaid expansion. That’s because the expansion is the only part of the Affordable Care Act that is voluntary.

The mandatory parts – including the requirement that individuals and large businesses carry insurance or pay a penalty – will take effect regardless of the Legislature’s decision on Medicaid, she said. Meanwhile, almost 1 million low-income people who would have been covered by the new federal funds would remain uninsured, she said.

Currently Florida has just over four million uninsured, Baker said - about 21.4 percent.  Under the health law’s provisions, counting Medicaid expansion, that will be cut by more than half, she said.

The newly-covered Medicaid population would be those with incomes of 138 percent of the federal poverty level or less – about $15,000 for an individual. Most of those who would be brought into the program are adults who currently don’t qualify because they don’t have young children at home, Baker said.

Through their questions, some members of both committees indicated they were skeptical of the conclusions.  Baker acknowledged there are a number of outcomes that can be forecast, depending on the assumptions used in economic modeling. She said she hopes to have more information by  Thursday.

The Senate Committee on ACA decided to put off the meeting it had scheduled this afternoon so that it can hear the update on Thursday. Sen. Joe Negron, who chaired the joint session, indicated that he agrees with those who favor expanding Medicaid.

“In the end, the issues’s going to come down to weighing values, of having some form of insurance coverage available” for the uninsured, he said.

To those who predict calamity, he said, “Let’s not underestimate the human spirit.” Medicaid expansion may or may not be a good idea, he said, but it would be better to have 7 percent of Floridians uninsured than 21 percent.

Baker's slides are available online.

***

In the House committee session that followed the joint session, Rep. Richard Corcoran, R-Lutz, said he saw no reason to wait until Thursday's update from the Baker team, that there's enough information presented already. Even if the new numbers are "staggeringly awful," it probably won't change anyone's opinions, he said, indicating attitudes are pretty well set.

Republicans on the committee said they don't want to rely on promises from the federal government to pay the full cost of the Medicaid expansion group for three years and then taper down to 90 percent by 2020, and remain there.

Corcoran likened it to someone offering him a $4 million beach house, no  money down and no payments for three years. After that, all you have to pay is 10 percent of the  mortgage.  "I say to the guy, 'Wait a second, who's this great benefactor who's giving me all this money?' He says, 'Don't worry, he's a great guy. His name is Gary Madoff.'" Investment advisor Madoff was sentenced to prison in 2010 for running an  pyramid scheme and stealing billions of dollars.

"You cannot rely on somebody who is borrowing 50 cents of every dollar," Corcoran said, referring to the federal government. "They are in essence bankrupt."

"My biggest concern, I come from a district of senior citizens. You can't manufacture doctors and nurses," Corcoran said. If Florida adds 1 million Medicaid patients, it will be hard for Medicare patients to find a doctor, he said.

Rep. Matt Hudson, R-Naples, made the motion to instruct staff not to prepare legislation to expand Medicaid.

"Can anybody honestly say they have a clear, decisive view of what the federal government's budget picture is going to look like for the rest of this year, let alone for a decade?" Hudson asked. "Think about that. The federal government  has had a challenge almost every single day over the last six months and yet somehow we're to believe they will be rock-solid, nothing will change, for a decade.

"I'm sorry. I don't subscribe to that notion," Hudson said.

Rep. Elaine Schwartz, D-Broward, said she couldn't understand "this fear that the federal government is going to welch on the deal. In a match situation, the federal government has NEVER welched on the deal. "

Hudson replied that it's not a matter of welching, but of recognizing reality. "The numbers are what they are."