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Senate budget thumps hospitals, others; gives workers a break on coverage

The Florida Senate today approved a proposed 2011-12 budget that would slash hundreds of millions of dollars for hospitals, mental-health services and the Medically Needy program.

Senators voted 33-6 to approve the spending plan. The House is expected to approve its version later today, setting up negotiations on a final budget in the coming weeks.

The budget would cut hospital Medicaid rates by 10 percent and eliminate money for outpatient adult mental-health and substance-abuse services. It also would stop covering hospital and drug costs in April 2012 in the Medically Needy program, which serves people who don't qualify for Medicaid but have debilitating illnesses.

With lawmakers facing a $3.8 billion shortfall for the fiscal year that starts July 1, Sen. Don Gaetz said they had to make cuts. The only alternative, he said, would be to raise taxes.

"None of us wanted to make these decisions,'' the Niceville Republican said.

But Sen. Paula Dockery, R-Lakeland, questioned whether tax increases were the only other possibility. She gave examples of other possible spending cuts, including an amendment today to spend $1.4 million to help build a community senior center in the Palm Beach County community of Belle Glade.

Similarly, Senate Minority Leader Nan Rich, D-Weston, said lawmakers should look at closing corporate tax loopholes to bring in more money. She said the budget would cause "unnecessary pain" in areas such as the Medically Needy program, which would only cover physician services beginning in April 2012.

The vote came after the Senate made a series of changes to the budget Wednesday.

In one of those changes, senators decided rank-and-file state employees should escape a large increase in health-insurance premiums next year. But employees could see their benefits trimmed.

The insurance decision came after Senate leaders proposed changes last week that could have forced tens of thousands of employees to swallow premium increases of $1,100 a year or more for family coverage.

Senators scaled that back dramatically Wednesday, approving a budget amendment that includes a $20-a-month premium increase for family coverage and no increase for individuals.

The amendment, however, would still lead to substantial increases for appointed workers and lawmakers, who have paid little in recent years for coverage. They would start being treated the same as rank-and-file employees --- meaning an appointed worker with family coverage could see costs jump from $360 a year to $2,400.

At the same time, Senate leaders want the state to negotiate revamped insurance-benefit packages to help restrain costs. It is too early to know what those packages would include, but benefits could be reduced.

Senate Budget Chairman JD Alexander, R-Lake Wales, said the insurance program will cost about $2 billion next year, up about $170 million from this year. He said "there is no free lunch.''

"I think this is a simple, direct approach that says we will live within our means,'' Alexander said.

Democratic Sen. Bill Montford, whose Tallahassee-area district is filled with state workers, said the proposal is "promising," compared to the earlier versions.

"I believe we can protect the taxpayers, and I think we can get a reasonably good deal for employees,'' he said.

Montford, however, said he remains concerned about increasing insurance premiums at the same time that lawmakers are looking at requiring employees to start paying into the state pension fund.

"The question to me is, how much can we expect them to absorb quickly?" he said.

Employee health insurance likely will be an issue in the upcoming budget negotiations, as the House has not proposed the same changes as the Senate. The Senate proposal would take effect Jan. 1.

Currently, individual rank-and-file employees pay $600 a year for insurance, while family coverage costs $2,160. That family cost would increase to $2,400 under the Senate bill.

Appointed officials and lawmakers pay $100 a year for individual coverage, which would increase to $600 in the Senate proposal.