By Jason D. Fodeman, M.D.
Adjunct Scholar, The James Madison Institute
Full Policy Brief: Florida’s Best Medicaid Option under the PPACA: Expand the Reforms, Not the Rolls
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INTRODUCTION: As Florida lawmakers return to work for the 2013 legislative session, the state’s role in implementing the Patient Protection and Affordable Care Act (PPACA) is a major concern. The decisions made this year could have huge consequences for Florida’s fiscal health for years to come.The PPACA, as originally enacted, presented states with a Hobson’s choice of (1) expanding eligibility for Medicaid to persons whose household income was at or below 138 percent of the poverty level established by the federal government (FPL) or (2) losing all current federal funding for the Medicaid program.In the case styled as National Federation of Independent Business v. Sebelius, a 7-2 majority of the United States Supreme Court ruled this to be unconstitutionally coercive and, in the process, essentially made the Medicaid expansion optional.This Supreme Court ruling has left states with two important decisions to make regarding the implementation of the PPACA. With regard to Medicaid, Florida must decide whether to expand eligibility to the aforesaid 138 percent of the FPL. That’s currently $15,415 for an individual and $26,344 for a family of three in 2012, but the FPL changes to reflect changes in the cost of living.For states that agree to this expansion of eligibility for Medicaid, the federal government has promised to cover 100 percent of the expansion costs for the first three years, 2014 through 2016. After that, the federal aid would gradually decrease to a matching federal rate of 90 percent by 2020.
Of course, all of these projections are based on the assumption that the federal government — currently plagued by record deficits and alarm over the growing national debt — will keep its pledges with regard to matching funds.In addition to weighing these options, Florida and other states have also been in the process of weighing another choice the PPACA requires them to make: whether to implement a state-based health insurance exchange or leave this task to the federal government.According to analysis by Avelere Health, as of December, 18 states had agreed to the Medicaid expansion while 11 states had rejected the expansion.1 Meanwhile, 26 states had explicitly refused to establish state-run exchanges. Of those, 23 states have opted for a federal exchange while three — Arkansas, Ohio, and Michigan — will set up a partner- ship exchange. An additional four states will also be implementing partnership exchanges, but have not explicitly rejected the possibility of a state exchange.2In the aftermath of the Supreme Court’s PPACA ruling, Florida Gov. Rick Scott ex- pressed concern and unwavering opposition to its implementation in Florida. In reference to the Medicaid expansion and state-based exchanges, Governor Scott said, “Neither of these major provisions in ObamaCare will achieve those goals, and since Florida is legally allowed to opt out, that’s the right decision for our citizens.”3
On Fox News, Governor Scott clearly stated his opposition, saying, “We’re not going to expand Medicaid because we’re going to do the right thing. We’re not going to do the exchange.”4However, more recently Governor Scott — in a November 2012 letter he sent to U.S. Health and Human Services (HHS) Secretary Kathleen Sebelius to request a meeting — that he desired to “work together” and “partner” with regulators in Washington to solve Florida’s health care problems.5 They met on January 8, and both sides declared it a productive meeting.In October 2012, The James Madison Institute (JMI) released a Policy Brief titled Options for Florida Going Forward under the PPACA. It analyzed the general effects of the law’s implementation and recommended against the expansion of Medicaid and against having the state create its own health insurance exchanges.This new Policy Brief will dig deeper into the negative effects of the Medicaid expansion in Florida, specifically documenting that Medicaid — in Florida and across the nation — is a program plagued by bureaucracy, ballooning expenditures, poor access, and low quality care.As Medicaid costs explode, regulators and legislators at- tempt to restrict costs by reimbursing providers less and less. Low reimbursements severely impede the access of Medicaid beneficiaries to timely and appropriate high quality care. Some studies even suggest that Medicaid patients receive worse care than the uninsured.A costly expansion of means-tested eligibility for Medicaid will not rectify the deeply-rooted problems with the program. In fact expanding the program will not only expand these problems and impact more people, but it will likely put more strain on the system and could very possibly worsen the already grave access problems and poor quality care that Medicaid patients encounter.Florida should not expand Medicaid but instead should work to institute additional reforms in its costly Medicaid program to ensure that Florida’s state and federal taxpayers get what they pay for and that the beneficiaries who rely on this program receive better access to high quality care.