There is nothing like a budget crisis to remind some members of the Florida Legislature that, unlike wine, problems don’t get better with time. Tallahassee is poised to lose anywhere from $1 billion to $2 billion in federal funds for not expanding Medicaid, possibly crippling public hospitals statewide.
Specifically, hospitals could lose the federal funds they have come to rely on, in part, to cover those who are uninsured or incapacitated. The Low Income Pool (LIP) federal matching funds processed through Medicaid will not be renewed after June 30 as punishment to states that don’t embrace the Affordable Care Act (ACA) and Medicaid expansion.
ACA mandates that states are required to expand their federal/state-funded Medicaid programs to provide medical-insurance coverage to adults who earn less than 138 percent of the federal poverty level, or $16,000 per year. In return, by expanding Medicaid, the federal government committed to paying for the expansion through 2016 and then 90 percent of the costs thereafter.
The U.S. Supreme Court makes it clear that states cannot be forced to expand Medicaid, but the elimination of LIP funding strongly “encourages,” if not forces states to reconsider. It is an effective form of coercion, but there is also a real need to reform the Medicaid program.
Approximately 800,000 to 1 million Floridians do not have health insurance. Although many are employed, they make too much to qualify for traditional Medicaid, yet too little to afford the premiums under ACA. Medicaid has long been Tallahassee’s sleeping giant with a voracious appetite: It makes up 30 percent of the state budget. Going toward the ACA model of expanding Medicaid has been rightly shunned because the model is unsustainable. Losing LIP funding, however, could turn the $1-billion budget surplus into a $2-billion deficit.
Like it or not, Medicaid expansion has made its way into a major political play in this legislative session. There is some good news. Last Tuesday, the Senate Health Policy Committee moved ahead with a novel Medicaid-expansion program that provides vouchers to consumers to purchase health insurance. The plan mirrors one recently approved in Indiana under the leadership of Gov. Mike Pence who also opposed ACA. Under Florida’s Senate plan, Medicaid is expanded ,and the beneficiaries would pay $3 to $25 a month, depending upon income.
It isn’t a handout. Certain fees, such as for emergency-room care, would apply. Recipients must be employed or show that they are looking for work or be in school to qualify.
Personal health insurance accounts are created so that individuals can purchase health insurance from private companies that best meets their needs. In essence, Florida creates its own healthcare exchange.
This accomplishes two things: insuring more residents and qualifying for federal funds. It is a lot of money: $50 billion in federal funds over the next decade. State Senate President Andy Gardiner has opposed Medicaid expansion but recognizes that Florida public hospitals would be crippled without federal funding.
In a written statement, Gardiner, said: “We have the obligation to make coverage high-quality affordable healthcare coverage, while promoting responsibility.” His statement is supported by A Healthy Florida Works, a bipartisan organization comprising 700 organizations, including chambers of commerce, businesses and community leaders who understand that a healthy workforce is a productive workforce.
While this may sail through the Senate, that is not the case in the state House.
Some are bitterly opposed to anything remotely associated with the Obama administration and they don’t appreciate being strong-armed by the administration. What they miss is that it’s the opportunity to create a new policy, like Indiana did, that is unique to Florida and helps keep families whole. Besides, accepting additional money for Medicaid expansion is no different than accepting LIP funds. Floridians pay federal taxes too; they are entitled to the benefits when needed.
Other states are reluctantly moving toward Medicaid expansion as a solution to a nagging problem. Helping hard-working, low-income families benefit from healthcare insurance is a no-brainer. If the House has a better solution, all are anxious to hear.