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Budget whacks $562M from health

Gov. Rick Scott released a proposed $65.9 billion budget Monday that would slash hundreds of millions of dollars from health- and human-services agencies and bank on a future expansion of Medicaid managed care.

The proposal would cut a total of $562 million during the coming year from the Department of Health, the Department of Children and Families, the Agency for Persons with Disabilities and the Department of Elder Affairs.

It also would hold down Medicaid costs by imposing 5 percent rate cuts on hospitals, nursing homes and other types of providers.

Scott would make the cuts while also reducing taxes and fees by $4.1 billion over two years, including cutting corporate-income taxes. He said during a news conference that his primary focus is creating jobs.

"This budget that we put out is a jobs budget,'' he said during a late afternoon news conference in the Capitol.

But Senate Minority Leader Nan Rich, a Weston Democrat who has long been a leader on health- and human-services issues, issued a statement blasting Scott's proposal. She said Florida has one of the highest unemployment rates in the country, after years of Republicans cutting business taxes.

"The retreaded voodoo economics we heard today will not right this ship,'' Rich said.

Lawmakers will consider Scott's proposal as they write a budget this spring for the fiscal year that starts July 1, though there is no guarantee they will go along with his ideas. Some lawmakers, for example, openly scoffed at former Gov. Charlie Crist's budget proposals.

Scott's proposal would reflect a reduction of about $4.6 billion from the current year's overall budget.

Medicaid spending actually would increase in Scott's proposal, with the Agency for Health Care Administration seeing its portion of the budget rise from $20.8 billion to about $22 billion, according to the governor's office. That increase primarily stems from a jump in Medicaid enrollment during the state's economic troubles.

But Scott would make cuts to keep Medicaid costs from potentially rising even more, including the 5 percent cuts in provider rates. One exception to the rate cuts would be doctors, who argue they are already severely underpaid for treating Medicaid beneficiaries.

Scott also said he plans to move forward with a proposal to dramatically expand the use of managed care in the Medicaid program --- also a top priority of legislative leaders. But that likely would not result in budget savings until the 2012-13 fiscal year.

"The primary thing is to go to a managed (care) product across the state,'' Scott said.

The Department of Health, the Department of Children and Families and the Agency for Persons with Disabilities would each face cuts of more than $170 million during 2011-12, according to the governor's office. The Department of Elder Affairs would see a nearly $39 million cut.

The proposals include turning over operations of three state mental hospitals to private companies and trimming about $60 million from money that goes to county health departments. Also, the budget proposal would eliminate about 3,000 positions in health-and human-services agencies, though many are likely vacant or in the mental-health hospitals targeted for privatization.

Though not technically part of the health- and human-services budget, state employees also would face cost-cutting in their health insurance over the next two years. During 2011-12, Scott would force lawmakers and many high-ranking employees to pay the same amount of health insurance premiums as other state workers --- doing away with a break that currently allows them to get insurance for a maximum of $360 a year.

In 2012-13, Scott would do a major overhaul, providing $5,000 for each employee's health insurance. If workers wanted more coverage than that --- including workers with families --- they would have to pay additional costs.

Not all parts of the budget, however, would face cuts in the Scott proposal. As an example, the proposal would increase funding for community mental-health programs and children's substance-abuse treatment programs, according to an initial analysis by the Florida Council for Community Mental Health.

Scott, a longtime health-care executive who campaigned last year as a political outsider, took the unorthodox step Monday of releasing his budget proposal during a gathering of Tea Party members in the Central Florida community of Eustis. He found a welcoming crowd, as the group rails against the size and cost of government.

Budget issues likely will dominate the upcoming legislative session, as the state faces a $3.6 billion shortfall for 2011-12. Some lawmakers argue the shortfall could be hundreds of millions of dollars higher because of a need to put money into reserves.

Republican legislative leaders issued a series of statements Monday that avoided staking positions on Scott's proposal, though they shared his view that the shortfall should be closed with budget cuts and not tax increases.

Last week, House Health Appropriations Chairman Matt Hudson, R-Naples, said he has made clear to health groups they will face cuts.

"The only question in my mind is whether it's a cut or a shave,'' Hudson said.

--Capital Bureau Chief Jim Saunders can be reached at 850-228-0963 or by e-mail at jim.saunders@healthnewsflorida.org.