In Depth
7:47 am
Thu January 10, 2013

New Report Slashes Cost Estimate on Medicaid Expansion

AHCA Secretary Liz Dudek released the report.

After two days of heavy criticism, Gov. Rick Scott’s administration released  a new, much smaller estimate of the cost of expanding Florida Medicaid late Wednesday night. The new report pegs the price tag at about $3 billion.

At the most, if all those eligible signed up, it would cost the state $5 billion over a decade, the new report says. That is less than one-fifth the cost that Scott has been citing.

Over the same time span, the expansion would bring in about $30 billion in federal funds, the new analysis says, enough to cover 910,000 uninsured low-income Florida adults. In other words, Florida would get about $10 in federal funds for every $1 it put into the expansion, the new estimate says.

It was released by the Agency for Health Care Administration, which governs the state Medicaid program and comes under the governor’s office. The release from AHCA Secretary Liz Dudek said only that the new numbers had been provided to the Florida House of Representatives. A budget analyst there, Eric Pridgeon, told AHCA in December that the first estimates were unacceptable, and state chief economist Amy Baker agreed.

The Florida Legislature and Scott will decide this spring whether Florida will accept extra federal funds to cover more of the uninsured under Medicaid as part of the Affordable Care Act.

Scott has consistently said it would be too expensive to go along with the Medicaid expansion, even though Florida’s rate of uninsured is one of the highest in the nation.  In an op-ed Sunday and at a press conference Monday, he said it would cost $26 billion in state funds over a decade.

He used the original AHCA estimates as the foundation for his objection to expanding the Medicaid program, saying it was unaffordable. The AHCA analysis assumed, among other things, that the federal government would not come through with the extra funds it promised under the Affordable Care Act for states that opted to cover the new Medicaid enrollees.

On Tuesday, Scott’s team came under fire  after publication of Health News Florida’s story: “ Legislative Analysts Told Scott His Estimates Are Wrong (But He’s Using Them Anyway).” The story was based on e-mails that circulated last month among members of the legislative budget commission for health and human services, including Pridgeon, Baker, AHCA’s Medicaid staff and the governor’s health policy and budget director Mike Anway.

That article drew national attention, and Tuesday night the Scott administration said it would consider alternative calculations. On Wednesday just before 9 p.m., AHCA Secretary Liz Dudek sent out the new estimates.

Anway said in an e-mail to the others last week that the governor’s office  still believes in the original estimates because he doesn’t believe the federal funds will come through. “The federal government has a $16 trillion national debt,  must borrow 46 cents of every dollar it spends, and in 2011 had its credit rating downgraded for the first time in history,” he wrote in explanation.