New study: Medicaid expansion could cost Florida $8.9 billion over 10 years


Medicaid expansion under Obamacare could cover an additional 1.6 million people in Florida. But even if the state opts out, about 370,000 people will be added to the program.

Florida’s lawmakers appear to be facing a choice of adding comparatively few people to the state’s Medicaid rolls at considerable cost or adding a lot more people for not much more money, according to a study by a Washington study group released this week.

The study by the Kaiser Commission on Medicaid and the Uninsured focused on the critical issue about what will happen to states if they choose to accept or reject Medicaid expansion under the Affordable Care Act.

The study showed that if Florida accepts Medicaid expansion, it will cost the state about $8.9 billion over 10 years to insure an extra 1.6 million people in the state-federal insurance for the poor.

If Florida opts out of the expansion — as the U.S. Supreme Court allows states to do — the state’s Medicaid enrollment will still go up by about 370,000 people, with an added cost to the state of about $3.5 billion over 10 years, according to the Kaiser analysis.

An increase in enrollment will occur under either scenario because many provisions of Obamacare will make it easier for people to apply and qualify for Medicaid, said Rachel Garfield, a Kaiser researcher. One example: People applying for insurance through the new exchanges will be directed to Medicaid if their income is below a certain level. Garfield said most of those who would be added to the rolls are likely to be children.

Once that group of 370,000 people is factored in for $3.5 billion, the additional cost of expansion would be a net of about $5.4 billion over 10 years to cover an additional 1.2 million people, according to the Kaiser analysis.

The reason for the per-person cost discrepancy is that the federal government will pay 100 percent of the expansion costs for the first three years, sliding down to 90 percent of costs after 10 years. Those added outside the expansion program will be paid at regular rates, with the feds paying about 60 percent and the state 40 percent.

The Kaiser study said that expansion will save money in other areas — about $1.3 billion over 10 years in Florida because of reduced payments to hospitals and other healthcare providers to support their services to the uninsured.

With that reduction in costs, the net additional costs of Medicaid expansion would be about $4.1 billion over 10 years, the study concluded.

Gov. Rick Scott has warned repeatedly that Medicaid expansion could be too expensive for Florida in these tight budget times. Last summer, he was reported to have said on several national television shows that Medicaid expansion through Obamacare would cost Florida about $1.9 billion a year — far higher than the Kaiser figures.

After the election, Scott’s opposition to the healthcare act softened. This week, his office said the exact costs are still being worked out. Spokeswoman Jackie Schutz said more information should become available when the state holds an estimating conference on the Affordable Care Act on Dec. 10.

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