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News & Press: Legislative News

Economists grapple with Medicaid expansion

Tuesday, July 30, 2019   (0 Comments)
Posted by: DCMS
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The News Service of Florida
By Christine Sexton


TALLAHASSEE --- State economists are struggling to come up with estimates of how much it would cost the state and how it would affect Florida’s economy if voters approve a far-reaching constitutional amendment that calls for expanding Medicaid.

Organizers, frustrated by the refusal of the Republican-controlled Legislature to back Medicaid expansion, have been gathering petition signatures to try to force a public vote on the issue.

State economists are charged by law with providing a detailed estimate of the financial impact, but they continue to wrangle over how many people would enroll in Medicaid --- and how much that coverage would cost --- if the proposed constitutional amendment is adopted.

One reason for the difficulty is that Medicaid expansion would be reimbursed by the federal government at a higher rate than the state receives from Washington for the traditional Medicaid program. At the same time, economists must figure out how expanded Medicaid eligibility could change how the state funds existing health-care programs and whether expansion would affect other insurance plans.

During a meeting Monday in Tallahassee, members of the Financial Impact Estimating Conference agreed to hold a fifth and final meeting next week to nail down the estimates.

Eric Pridgeon, the budget director for the House of Representatives, raised concerns with projections by Amy Baker, head of the Legislature’s Office of Economic and Demographic Research, that 245,842 people would enroll in the Medicaid program if voters approve expansion. Expansion, allowed under the federal law commonly known as Obamacare, would enable enrollment of low-income childless, uninsured adults who are currently not eligible.

“It feels a little low to me,” Pridgeon said of the projections.

In addition to flagging concerns with enrollment, Pridgeon, and his Senate budget counterpart, Cynthia Sauls Kynoch, disagreed with Baker and her staff’s findings that a Medicaid expansion could save tens of millions of dollars when it comes to inpatient hospitalization of prisoners.

Baker and her staff estimated that the state could save $42 million a year in general revenue, which is primarily derived from sales taxes. 

Baker’s team contended that the savings would be a result of reimbursing hospitals using Medicaid rates instead of the current policy of paying Medicare rates.

Baker’s staff noted that Medicaid rates on average are 56 percent of Medicare rates. Moreover, some hospitals are getting paid 20 percent higher than the Medicare rates, Baker’s staff said.

But legislative budget officials cautioned Baker that the prison health care-system is underfunded and that it may not be able to sustain that kind of further reduction.

The economists reached agreement on some issues during the lengthy meeting Monday.

For example, they concurred that Medicaid expansion would force more than 593,000 people off the federal health-insurance exchange set up by Obamacare. Those people are purchasing policies from the exchange that are subsidized with tax credits and, if they purchase what are known as “silver tier” plans, additional cost-sharing reductions.

More than 1.783 million people in Florida are enrolled in Obamacare plans in 2019, according to the federal Centers for Medicare & Medicaid Services.

Economists are doing an in-depth review of the proposed constitutional amendment under a new law, which, in part, requires the Financial Impact Estimating Conference to develop a statement that would appear on the ballot to inform voters whether the amendment would increase or decrease costs or revenues and, if so, to what extent. 

While the economists work on the issue, it is not clear if --- or when --- the proposed Medicaid constitutional amendment will appear before voters.

Florida Decides Healthcare Inc., the political committee behind the proposal, has submitted enough valid petition signatures to trigger the financial review and a Florida Supreme Court review of the proposed ballot wording. But to make it onto the 2020 ballot, the group would need to submit 766,200 valid signatures.

The state had received 79,327 signatures as of Tuesday afternoon.

Dan Newman, a spokesman for Florida Decides Healthcare Inc., told The News Service of Florida that the group has  “not made a decision about whether we have the resources and the time to.be on the ballot in 2020.” Organizers have to meet a February petition-signature deadline to go before voters next year.

An alternative could be to wait until 2022.

Florida Decides Healthcare maintains expanding Medicaid eligibility would save the state nearly $200 million in fiscal year 2022-2023

Monday’s meeting was the fourth that the economists held on the proposal. There had been agreement in prior meetings to an estimate of about 260,000 newly eligible enrollees.

But Pridgeon wasn’t the only one who raised concerns about the enrollment projections.  Nick Stehle, a senior research fellow for the Foundation For Government Accountability, said at least 1.7 million people would enroll in the Medicaid program if the expansion were made available.