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Big Medicaid Gamble Based on Letter

Tampa Tribune

Florida's Republican legislative leaders say they believe they can get full federal funding for Medicaid expansion under the Affordable Care Act, even though they propose to use it to buy subsidized private health insurance.

If they are wrong, they will be giving up a huge windfall of federal funding, which state economists last week estimated at $51 billion over the next decade. But if they are correct, they will have accomplished quite a political feat:

They will be able to say they extended health coverage to about 1 million low-income uninsured Floridians without having to go along with two programs they hate: the Affordable Care Act a.k.a. "ObamaCare," and Medicaid, the joint state and federal insurance program for some groups of poor people.

In other words, they can pass Medicaid Expansion without having to admit it, said State Rep. Mark Pafford when Health News Florida told him about the letter. "It looks like they're saying one thing and doing another."

Democrats, hospital executives, and advocates for Florida's 4 million uninsured were taken aback and frustrated on Monday when the Senate Select Committee on the Affordable Care Act voted 7 to 4, along party lines, not to expand the Medicaid program as the ACA describes.

On Tuesday morning, in fact, the Florida Hospital Association and others working under the name of "Florida Remedy" held a rally on the steps of the Old Capitol to protest the vote and push for expansion of Medicaid. The hospitals say they're depending on the funds to make up what they're losing in other parts of the ACA.See video of press conference.

The reason why lawmakers were able to defeat the Medicaid expansion proposal while still feeling optimistic that Florida can get the $51 billion lies in a letter sent to state Medicaid directorson Nov. 20, said Senate President Don Gaetz' spokeswoman Katie Betta.

Sen. Joe Negron, chair of the Senate committee that took the vote yesterday, is writing a letter to Gaetz to explain all this, Betta said.

The federal letter that Negron is relying on says that states have "significant flexibility to design Medicaid benefit packages" under section 1937 of the Social Security Act, enacted as part of the Deficit Reduction Act of 2005. The letter was written by Cindy Mann, who is director of Medicaid and related children's insurance programs at the Centers for Medicare and Medicaid Services.

A CMS spokeswoman said Tuesday morning that she would check on whether the letter allows Florida to do what Negron wants to do.

On Monday, as Health News Florida reported, Negron led the Senate committee Republicans in voting down the Medicaid expansion proposal by saying he has a "Florida Plan" that would be "a better system than the one Washington created." Other committee members dubbed it the "Negron Plan."

He said he didn't have anything on paper, but said it would use both federal and state funds to subsidize private health coverage to the group that the ACA made eligible for Medicaid,  mostly adults who aren't disabled, have no children living at home and live on  under 138 percent of the federal poverty level -- about $14,000 for an individual.

In June, when it upheld the constitutionality of most of the ACA, the Supreme Court ruled that the states could decide whether to participate in Medicaid expansion, since the program is jointly funded and regulated.  Even though the ACA was politically unpopular in many states, particularly Florida, many thought states would be reluctant to turn down billions of dollars in federal funds.

The expansion promises 100 percent funding for the expansion population for the first three years, then tapers to 90 percent by 2022, where it remains -- at least in theory. In rejecting the Medicaid expansion last week, members of the House Select Committee on the ACA said they doubted the federal government would come through with the money.

Negron's substitute plan, as he outlined it at Monday's meeting, would have five "guiding principles:

--Florida Healthy Kids Corp., a popular public-private group that offers children coverage on a sliding scale, would expand to manage it.

--State and federal funds would be used to subsidize the coverage.

--The new group of insured persons would choose among private health plans, as the parents of children  enrolled in Healthy Kids do now.

--Everyone would be required to pay something, even if it's as little as a dollar or two co-pay.

--Each enrollee in the plan would have a bank account into which the state could deposit bonuses for healthy behaviors and out of which the insured person could make co-pays.

Carol Gentry, founder and special correspondent of Health News Florida, has four decades of experience covering health finance and policy, with an emphasis on consumer education and protection.