House Packet on Medicaid Called Misleading

Apr 29, 2015

Florida House leaders, who for three years have rejected federal funds to expand health coverage to the poor, brought the legislative session to an early halt Tuesday because of their rock-solid belief that “Medicaid is broken.”

House Appropriations Chairman Richard Corcoran, R-Land O'Lakes
Credit AP

This strongly held position is not new.  It developed in the past when doctors shunned Medicaid because of low pay rates. Even as Medicaid has been transformed and turned over to the private sector, the attitude has persisted and intensified among groups opposed to the Affordable Care Act and all its parts, including Medicaid expansion.

Last week, the position appeared in materials distributed at a Florida House Republican caucus held behind closed doors. They contain data that appear to provide a scientific case against Medicaid expansion and the Florida Senate proposal to accept $2.8 billion in federal funds to cover 800,000 low-income uninsured next year.

Health News Florida received a copy from the House Majority Leader’s office and attempted to fact-check it using published studies and comments from researchers at Georgetown University Health Policy Institute and the Henry J. Kaiser Family Foundation. 

Both organizations are non-partisan and neutral on health policy matters. Rachel Garfield, associate director of the Kaiser Commission on Medicaid and the Uninsured, declined to review the materials or comment on political issues. But she explained what she and a colleague found when they reviewed the research on Medicaid. Their conclusions were quite different from the materials in the packet and the comments made recently by House members on camera and in print.

Joan Alker, director of the Georgetown Institute’s Center on Children and Families, reviewed comments by House leaders and commented on them. (She has written that she hopes that Florida will cover the uninsured, but has taken no position on specific legislation.)

Alker said the  comments and materials that the House relied on were badly flawed and discussed several of them. She said there were “so many inaccuracies and misperceptions” that “really it would take too long to address them all.”

Rep. Jason Brodeur, chair of the House Health and Human Services Committee, who reportedly distributed the packets at the caucus, did not respond to phone messages or written questions about who provided the materials. Among them is an opinion column by Brodeur, R-Sanford, and Matt Caldwell, R-North Fort Myers. Its headline: "House can't support Senate plan, or count on federal money."

Rep. Jason Brodeur, R-Sanford
Credit Florida House of Representatives

Here is a review of some House assertions and what available evidence shows.

Assertion:  The Senate wants to expand Medicaid.
Finding:  Technically true, but misleading.

The House insisted on calling the Senate plan “Medicaid expansion” because the money would come from that part of the federal budget.  But the plan, which would require patients to pay a small premium and to be working or going to school, bears little resemblance to traditional Medicaid.

The Senate aims to cover Floridians who fall into the “coverage gap” created when Florida decided not to expand Medicaid. They have incomes too low to qualify for a subsidized private plan on the federal Marketplace, but don’t meet the state’s strict guidelines for Medicaid.

Adults who have children at home can qualify for Florida Medicaid only if their household income is less than the Federal Poverty Level – about $20,000 for a family of three. Those who no longer have children at home don’t qualify for Medicaid in Florida regardless of their incomes.

The Senate calls its plan the Florida Health Insurance Affordability Exchange (FHIX).  It’s described as a “free-market” alternative to traditional Medicaid in which patients could enroll in private plans through a health-insurance exchange. It actually sounds a lot like the Affordable Care Act exchange already in use by uninsured people who have incomes over the poverty level.

Assertion:  The Senate plan has no chance to win approval from the Obama administration. 
Finding:   Overly pessimistic.

House Speaker Steve Crisafulli, R-Merritt Island, dismissed the possibility that the Senate’s FHIX plan or anything like it could win a waiver approval from the Obama administration. He may be right that some parts of FHIX might not pass muster, such as the six-month cutoff for participants who don’t pay their premiums. But Obama administration officials are eager to see Medicaid expansion come to the third largest state, which still has millions of uninsured.

Joan Alker, director of Georgetown University's Center on Children and Families
Credit Georgetown Health Policy Institute

Alker says two states, Iowa and Arkansas, have won approval to use their federal funds to buy the uninsured coverage in the federal Marketplace.  

Assertion: Medicaid’s already too expensive; it accounts for one-third of the Florida budget.
Finding: That depends on how you do the math.

On Tuesday, in an op-ed published by the Tampa Bay Times, Crisafulli stated: “Medicaid currently covers 3.7 million Floridians at a cost of $23.5 billion per year, or about one-third of Florida’s budget.” 

The Speaker has his numbers right; he’s not the first Florida official to complain about Medicaid eating up one-third of the budget. But some say that’s misleading because it implies that the financial burden is on Florida taxpayers.

According to current state records, 60.5 percent of the cost of the current Florida Medicaid program is paid by the federal government. State expenditures on Medicaid --$9.5 billion -- account for just 12 percent of the entire budget. They amount to 20 percent of state spending, which is $48 billion.  

Assertion: Accepting the federal dollars would be a financial burden for Florida.
Finding:  Not so.

This has been a recurring theme during the three-year debate over whether to accept Medicaid funding of an estimated $50 billion over 10 years to cover close to 1 million people. 

While federal dollars cover the entire cost until the end of 2016 – one reason the Senate pushed the measure so hard this session – the state’s share would gradually increase, topping out at 10 percent.

At first, state officials protested that the state’s cost would be enormous, with Gov. Rick Scott offering an estimate of $26 billion over 10 years.  But those numbers were based on flawed assumptions, as Health News Florida reported in 2013.

In April 2013, AHCA analysts produced a report calculating that there would be a net benefit to the state from Medicaid expansion.

Amy Baker, chief state economist
Credit State of Florida

And last week, State Economist Amy Baker told the Senate at a public hearing that even without the ripple effect, and leaving aside the moral question of coverage for the poor, Florida would benefit financially from accepting the federal funds. She said the state's savings on programs it would no longer have to finance via general revenue would entirely cover the state’s 10 percent matching share, with some left over.

Assertion:  Medicaid isn’t as good as private insurance.
Finding:   In Florida, Medicaid IS private insurance.

House Appropriations Chairman Richard Corcoran, who will be Speaker in 2016, loathes Medicaid.  He once said, “I can tell you right now,  I’ll go door to door, I will go in the newspaper on any media, I’ll tell everyone in my district,  'I will fight with my last breath to keep you off Medicaid and get you on private insurance.'’’

Corcoran’s attitude has not thawed though a federal waiver allowed the state to move nearly all the patients in the Florida program to managed care.  The pilot project began in 2005 under then-Gov. Jeb Bush, in five counties, and grew.   

In 2013, the Obama administration granted Florida’s wish to take the program statewide under a broader waiver. The Agency for Health Care Administration carried out that mission over the past two years.

Today, most Medicaid patients in Florida, including those in nursing homes, are required to be enrolled in a managed care plan. They have a choice among commercial HMOs or a Provider Service Network (PSN), an association led by medical groups or hospitals. The companies bid for the Medicaid business and are paid a set amount per month to manage the care of that member, just as they would for commercial enrollees.

One of the most conservative, anti-Obamacare voices in Florida gave the state’s Medicaid overhaul a thumbs-up in a Heritage Foundation publication in November 2011. Tarren Bragdon, president of Florida Foundation for Government Accountability in Naples, wrote that “Florida’s Medicaid Reform Pilot has been a decided success. It has improved the health of enrolled patients, achieved high patient satisfaction, and kept cost increases below average, saving Florida up to $161 million annually.”

Bragdon wrote that if other states followed Florida’s example, “Medicaid patient satisfaction would soar, health outcomes would improve, and Medicaid programs could save up to $91 billion a year.”

Assertion:  Covering the uninsured will make the doctor shortage worse.
Finding:  Maybe, but not necessarily.

This has been a recurring complaint from Rep. Matt Hudson, R-Naples.  He says that covering the poor will put pressure on the limited supply of primary-care doctors and specialists on whom Medicare patients rely.

One of the requirements for plans to participate in Florida Medicaid is that they must provide enough primary-care doctors and specialists to give Medicaid patients good care. The state plans to check both the quality of care and patient attitudes, AHCA says.

Supporters of expanding coverage say Medicaid HMOs have the know-how and motivation to make more efficient use of the staff they have and can recruit professionals from other states.  Also, they can contribute to training new ones.

One possibility is that an influx of covered patients would force health plans, medical practices and hospitals to become wiser and more efficient.  The health system might reallocate resources from the costliest services, the emergency department and intensive care, to a clinic that can catch illnesses at an early stage.

The influx of patients would also encourage better use of nurse practitioners and new technologies, such as telemedicine – two of Rep. Hudson’s favorite themes.

Assertion:  Medicaid patients have worse outcomes than people with no insurance at all.

Finding:  Not true.

Corcoran, R-Land O’Lakes, attracted the wrong kind of attention when he sent constituents an e-mail claiming that Medicaid recipients were “97 percent more likely to die” than the privately insured.  Earlier this month, PolitiFact rated that “mostly false.”

Medicaid patients who underwent surgery in a Virginia study did indeed die at greater rates than others, including the uninsured. However, as PolitiFact reported after talking to experts, including an author of the study, the patients didn’t die at a greater rate because they were on Medicaid.

It was more likely the reverse: They were probably on Medicaid because they were in an advanced stage of disease, since low-income adults who would not otherwise qualify for Medicaid can enroll once they become severely disabled.  

The pitfall that tripped up Corcoran is the difference between causation and correlation. Two things can happen at the same time, but that doesn’t mean one causes the other.

Corcoran insisted to PolitiFact that the UVA study supported his conclusion “that Medicaid is a subpar health care delivery system.” He also pointed to the Oregon Health Insurance Experiment study by researchers from Harvard University, saying it showed no better outcomes in a group that entered Medicaid than a matched group that had to wait.

But fact-checkers found there was much less depression in the group and less fear of financial ruin from medical bills. The authors said a difference in health outcomes would likely take more time to show up than the two years covered in the study. 

The studies that Corcoran based his views on were just two of thousands. Garfield and a colleague at the Kaiser Foundation conducted a review of all the literature to assess whether Medicaid coverage accomplishes the goal of connecting low-income patients to appropriate health care.

“You need to look at a much broader array of studies” to get a clear view, Garfield said.

While results were mixed, they found that:

  • Medicaid beneficiaries and the privately insured had comparable access to preventive and primary care.
  • Specialists are less willing to accept Medicaid patients than those who are privately insured, probably because the pay rate in many states is quite low.
  • Having Medicaid is much better than being uninsured.  It increases access to care, improves adults’ mental health, and virtually eliminates catastrophic medical expenses. Left unclear is whether Medicaid coverage makes patients healthier over time than their uninsured counterparts.

As time passes, more data are clarifying the results. A year ago, The New York Times reported a sharp drop in the death rate after Massachusetts adopted its 2006 law requiring its residents to have health insurance and expanding Medicaid. The death rate fell by about 3 percent in the four years after the law went into effect, according to the study in the Annals of Internal Medicine. 

The Massachusetts law served as the model for the Affordable Care Act.

Carol Gentry is a special correspondent for WUSF in Tampa. Health News Florida receives support from the Corporation for Public Broadcasting.