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CMS: We're Open to State Ideas

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U.S. Sen. Bill Nelson says he has hopeful news for those who are stewing over Florida's refusal of $51 billion in federal funds to cover the state's low-income uninsured.

Nelson, D-FL, says the federal agency in charge of Medicaid is "ready and willing to work directly with Florida on a Florida-designed approach" to covering those below the poverty level. He cited a letter he received Friday from Marilyn Tavenner, chief of the Centers for Medicare & Medicaid Services (CMS).

Tavenner expressed interest in a plan Nelson floated recently that would involve using "local dollars" to provide the state matching funds for Medicaid expansion beginning in 2017.

"To the extent that a state would like to pursue a financing arrangement such as the one you describe in your letter," Tavenner writes, "we are certainly interested in working directly with the state and stakeholders to consider how such a proposal would be designed and implemented."

She said CMS has "worked closely with states from across the nation to support homegrown Medicaid expansions that work for individual states."

Under the Affordable Care Act, federal funds pay 100 percent of the cost for Medicaid expansion for three years: 2014-15-16. In 2017, the ratio tapers slightly until it reaches 90 percent in 2020 and remains there.

Florida's federal Medicaid match rate is about 60 percent, with the state paying the rest. That's the ratio to pay for 245,000 people in Florida who enrolled in Medicaid between October and February.

As the Associated Press noted Friday, Medicaid enrollment increased 8 percent when uninsured people who tried to sign up for a health  plan through the federal exchange talked to a navigator. They were surprised to learn their incomes were low enough to qualify for Medicaid, and they hadn't been aware of it. (Health care economists predicted the Affordable Care Act would produce this "woodwork effect.")

How much the new enrollees will cost the state is still uncertain, says Medicaid Director Justin Senior, since their health spending may be less than the usual enrollee. He said that they would probably have found their way into Medicaid before now if they had had much exposure to the health-care system, since providers have an incentive to get the uninsured signed up so that they can get paid.

When Florida declined to expand Medicaid and turned down the$51 billion in federal funding over 10 years, it created an odd situation. Floridians who have incomes below the poverty level -- $11,490 for a single person -- but above the Medicaid eligibility level must remain uninsured. (The income level for Florida Medicaid eligibility depends on a number of variables, but for non-disabled adults it is lower than in most states.)

About 800,000 uninsured persons in the state fall into the coverage gap -- too "rich" for Medicaid, too poor for subsidized plans on the health-care exchange.

Nelson's suggestion is that the state's match amount for the expansion population could come from counties or hospital taxing districts that already raise money for indigent care. He said that should allay the objection from some elected officials in Tallahassee that the expansion program would be a financial burden for state finances.

"This plan," Nelson writes, "eliminates that concern." 

Nelson released to the media a copy of a letter he sent Friday to Florida House Speaker Will Weatherford, R-Wesley Chapel, and Senate President Don Gaetz, R-Niceville, advising them of the news. Gaetz supported Medicaid expansion last year, but Weatherford blocked it. Neither has raised it as a possibility during this session.

Indeed, if the Legislature were to surprise everyone and pass some form of coverage for the low-income uninsured, it would put Gov. Rick Scott on the spot. His re-election campaign is based on slamming "Obamacare," of which the Medicaid expansion plan is a part. So he would look hypocritical if he signed such a bill. But if he vetoed it, he might look heartless.