Critics of the health care reform
proposals moving through Congress have been sounding the alarm
about one component - the proposed Medicaid expansion –
that they say could bankrupt the States. That claim is simply
not valid, however. In particular, it isn't valid for
Florida.
It's true
that Florida
normally contributes about 45% of the cost of the current Medicaid program, with
the federal government picking up the rest. But that is not the case
under the proposals receiving serious consideration at
present.
First,
Medicaid expansion wouldn't occur until 2013 or 2014, well into
our economic recovery. Second,
Florida's
share would top out at only about a dime of every dollar spent.
As a result, Florida would need to use – at
worst[i] -
about 1.3% of its expected General Revenue to cover the new
recipients through 2019. However, for several reasons, and
especially because not all low-income people will qualify, the
actual impact would be significantly
less.
The
expansion would help Florida
immensely by providing real health coverage to hundreds of
thousands of very low-income workers and their families who
couldn't otherwise afford it. At the same time, those already
covered would pay much less in the form of shifted costs for
uncompensated care.
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|
House or Senate
Committee |
Senate
Finance[i] |
House
Energy and
Commerce
(H.R. 3200 – Incl. “Blue
Dog” Amendments) |
House
Education and
Labor
(& Ways and Means)
(H.R. 3200) |
Senate
HELP[ii]
(Placeholder proposal –
Unlikely)
|
|
Proposed
Medicaid
Expansion |
Up to 133%
of
poverty |
Up to 133%
of
poverty |
Up to 133%
of
poverty |
Up to 150%
of
poverty |
|
Projected
State Match
Rate for
Expansion[iii] |
2013
2014
2015
2016
2017
2018
2019
2020+ |
N/A
7.7%
8.7%
9.7%
10.7%
11.7%
12.7%
12.7% |
N/A
N/A
10.0%
10.0%
10.0%
10.0%
10.0%
10.0% |
N/A
0%
0%
0%
0%
0%
0%
0% |
N/A
0%
7.5%
15.0%
22.5%
30.0%
37.5%
45.0% |
|
MAXIMUM
Annual Cost of
Medicaid
Expansion to the State
(Average Through 2019)[iv],
[v],[vi],[vii],[viii] |
$440 Million[ix]
|
$430
Million |
$0 |
$1.2
Billion |
|
MAXIMUM
% of State General
Revenue
Needed to
Fund Expansion
(Average Through 2019)[x],
[xi],[xii] |
1.3% |
1.3% |
0.0% |
3.4% |
[i] Under the
Senate Finance Committee bill as amended, States with both
below-average Medicaid enrollment (as a % of state population)
AND less than 12%
unemployment in August 2009 would have no match requirement
through 2018.
Florida meets the
first condition, but does not quite meet the
second.
[ii] The Senate HELP
Committee does not have jurisdiction over issues related to the
Medicaid program. The issue of state matching requirements for
expansion was not fully scrutinized.
[iii] The projected State match
rate for currently Medicaid-eligible groups in
Florida is 45.0%,
per the Legislature's most recent Social Services Estimating
Conference. That rate generally varies somewhat from year to
year due to economic factors. Other potential changes to the
current FMAP formula are not factored into these
estimates.
[iv] The average cost is shown in 2009 dollars. However,
calculations of percentages below incorporate annual adjustments
for inflation.
[v] The
source of per recipient per year cost estimates is the Agency
for Health Care Administration.
[vi] Medicaid costs used in this calculation were
adjusted for inflation at a rate of 4% per year, which is
consistent with both a trendline based on the most recent State
Social Services Estimating Conference forecast and the projected
nationwide overall Medicaid spending growth
rate.
[vii]Each
multi-year average includes only the years following the launch
of Medicaid expansion under the corresponding
proposal.
[viii]The
cost should be considered a maximum because: 1) many uninsured
Floridians who are income-eligible for Medicaid will
nevertheless not qualify (e.g., undocumented workers), 2) a
significant portion of the State's share of Medicaid funding is
from a source other than General Revenue, and 3) the cost per
recipient per year may be lower than the estimate used here, as
current Medicaid recipients are in poorer health overall than
those gaining access to Medicaid through
expansion.
[ix] The National Conference of State Legislatures
estimated the number of new Medicaid recipients from 2014-2019
at 991,000 under the Senate Finance Committee proposal. Our
estimate is more conservative (i.e., anticipates greater
enrollment). Substituting in the NCSL estimate of recipients,
the average cost drops from $440 million per year to $385
million. NCSL's own
estimate based on Congressional Budget Office analyses and CMs
data was similar ($383 million).
[x] General
Revenue projections through 2017 are based on the Legislature's
Long-Term Revenue Forecast. For 2018 and 2019, a placeholder
growth rate of 4% was used.
[xi]
The State fiscal year runs from July 1- June 30, while the
federal fiscal year runs from October 1 – September 30.
Adjustments were made to synchronize the time periods under
consideration.
