Gov. Rick Scott is using a questionable state "study" as evidence that the federal health care law will cost the state billions of additional dollars.
In an guest editorial written for the Tampa Bay Times on Sunday, and again on Monday during a Washington, D.C., press conference, Scott cited a state analysis that says the health care law would cost Florida taxpayers $26 billion over the next 10 years.
The money would be needed, Scott says, to pay for expanding Medicaid, a government-run health insurance program for the poor.
"As you know Floridas Agency for Health Care Administration put out their estimate of what the expansion would cost just for Florida taxpayers and its over $26 billion," Scott told Washington reporters after meeting with Health and Human Services Secretary Kathleen Sebelius.
Dont believe that number.
In this case, the Agency for Health Care Administration an agency Scott directs did indeed release a presentation that concluded that Florida taxpayers would be asked to pay $25.8 billion over 10 years to implement an expansion of the Medicaid system.
But the state study relies on questionable or downright misleading assumptions to reach its eye-popping figure.
We cant say what the cost will be to the state and if there will even be one. Outside groups such as the Kaiser Family Foundation, for instance, have estimated the additional cost to the state would be a little more than $1 billion between 2013 and 2022.
The state figure, however, ignores a fundamental component of the health care law namely that the federal government will pay for most of the expansion.
This requires a little bit of explanation, so bear with us.
One of the key components of the new federal law, and one of the components that Scott and Republicans particularly dislike, is that most Americans will be required to have some form of health insurance or pay a penalty.
As a result, the federal government wants to expand Medicaid coverage to cover more Americans who are poor.
States, which manage Medicaid, can decide whether to expand the program or not, but to make the option enticing, the federal government offered to pick up most of the costs to cover more people.
Over the past 20 years, the federal government has paid for about 58 percent of the costs for current Medicaid recipients. Under the expansion, the government would pay 100 percent of the costs for newly eligible Medicaid recipients for the first three years (2014-16). In 2017, the federal government would cover 95 percent of the costs, 94 percent of the costs in 2018, 93 percent of the costs in 2019 and 90 percent of the costs in 2020 and beyond.
Why is this breakdown so important?
Because the state study ignores it completely.
The state study calculates the cost of the expansion based on the federal government paying for only about 58 percent of the costs.
Also, the most recent cost estimate from the state which was published in December includes revisions that only add to the theoretical state bill, according to our analysis. Among them:
In a January 2012 report, the state assumed people who are now eligible for Medicaid but not enrolled would slowly transition into the health care program over a period of three years. In the most recent report, the state said they would all enter Medicaid immediately.
Similarly, the January 2012 report concluded that just 40 percent of newly eligible Medicaid recipients would enter the system in 2014. By December 2012, the number had been revised up to 60 percent.