George Gibbs Center for Economic Prosperity

Flor⁠i⁠da’s Op⁠t⁠⁠i⁠ons for Implemen⁠t⁠⁠i⁠ng ⁠t⁠he Affordable Care Ac⁠t⁠

By: The James Madison Institute / October 10, 2012

The James Madison Institute

George Gibbs Center for Economic Prosperity

October 10, 2012

FOR IMMEDIATE RELEASE:
October 10, 2012
CONTACT:
Valerie Wickboldt
vwickboldt@jamesmadison.org
(850) 383-3131 x 628
Florida’s Options for Implementing the Affordable Care Act
~JMI policy brief focuses on statewide effects of PPACA and choices for Florida ~
TALLAHASSEE, Fla. – A new policy brief from The James Madison Institute (JMI) provides guidance for state leaders on the looming decisions with regard to implementing the Patient Protection and Affordable Care Act (PPACA). The study, Options for Florida Going Forward under the PPACA explains that as a result of the recent U.S. Supreme Court ruling, Florida must now decide whether to assume major new costs to implement the Act’s key provisions or else leave some of the responsibilities for the federal government to handle.“Conventional wisdom in public policy normally cautions against procrastination. However, in the case of PPACA implementation, JMI recommends lawmakers table any steps that can be delayed,” said Dr. Robert McClure, JMI president and CEO. “With litigation pending, public disapproval increasing and promises from political candidates being pledged to alter or repeal the Act, deferring action is the most prudent path for Florida.”Additionally, the brief provides a timely answer to a key question: what’s next for Florida’s Medicaid program in the wake of the U.S. Supreme Court on the PPACA.“The answer matters to many, especially to the low-income families who rely on Medicaid for their health care and Florida’s state officials, who have seen the Medicaid program’s cost soar at an unsustainable rate, devouring scarce dollars needed for other worthy purposes ranging from education to public safety,” said Robert Sanchez, JMI policy director.Regarding the Medicaid and other PPACA provisions, Florida’s must decide whether to:*Set up a PPACA-prescribed health insurance exchange or leave it to the federal government.
JMI Recommendation:Florida should not expend the effort and expense of establishing health insurance exchanges that may or may not last if the Act were to be significantly altered or entirely repealed.

The Congressional Budget Office (CBO) estimates that the average federal benefit would amount to approximately $4,800 per person annually and cost the federal government about $681 billion through 2021.
Florida is among a group of states that have not accepted federal exchange-related grants and intend to leave creation and administration of exchanges to the federal government. A recent Washington Post article outlines this trend, “Many states not prepared for health-care law.”
States should be aware of litigation involving the availability of tax credits in federally created exchanges.

**Expand Medicaid and accept new federal funding under the Act’s terms or retain its existing program and reject new funds.
JMI Recommendations:Florida should not participate in the massive and costly expansion of the Medicaid program as contemplated under the Act; Florida should continue to seek whatever federal waivers may be necessary to move forward with Florida’s Medicaid reform.

Even without the PPACA’s expansion of Medicaid, state governments have found it very difficult to meet their ever-increasing Medicaid funding obligations, which restrict their ability to invest in other priorities like public safety, education, infrastructure, etc.
The PPACA locks states into providing services and care to a large number of people with incomes below 138% of the federal poverty level; the Florida Agency for Health Care Administration (ACHA) estimates numbers of Medicaid recipients will more than double (4.5 million total enrollees under PPACA).

***Provide the level of health insurance coverage prescribed by the federal law for all employees working 30 or more hours a week (including OPS employees who are not currently eligible to participate in the State Group Insurance Plan) or pay a substantial annual penalty (as a result of being a large employer covered by the PPACA’s mandate).
JMI Recommendation: Florida should defer a decision regarding the PPACA mandated expansion of employer health insurance coverage pending a cost-benefit analysis.

If Florida expands coverage, the Florida Department of Management Service’s Division of State Group Insurance (DSGI) projects program enrollment and expenses to increase by 21,580 employees and more than $200 million per year, respectively, by 2014-2015.
Even if Florida does offer health coverage to all applicable employees, some full time employees will opt out of the state plan to receive federally subsidized coverage from an exchange, which will incur a $3000 per employee penalty for the state.
Many employers will pay federal fines under the PPACA, as the CBO estimates revenues of $113 billion from employer penalties by 2022.

“Overall, Florida should continue to look for opportunities to mount legal challenges to PPACA-generated federal rules, and challenge any specific provisions of the Act that exceed the constitutional authority of the federal government,” said Sanchez.The full version of the policy brief, Options for Florida Going Forward under the PPACA, can be accessed at http://bit.ly/SQ2h9K.  Recent Capitol Vanguard articles referencing the PPACA can be accessed here:
Commentary: Obamacare and Roberts, Law of the Land – http://bit.ly/QR5Akw
Commentary: The Well-Meaning Immorality of “Obamacare”- http://bit.ly/Ru4wRp
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Trusted Solutions for a Better Florida: Founded in 1987, The James Madison Institute (JMI) is Florida’s oldest and largest nonpartisan, nonprofit research and educational organization. JMI is dedicated to advancing such ideals as economic freedom, limited government, federalism, traditional values, the rule of law, and individual liberty coupled with individual responsibility. All JMI publications are available online at www.jamesmadison.org. For additional information please contact Valerie Wickboldt at 850.386.3131 x 628 or vwickboldt@jamesmadison.org. Twitter: @JmsMadisonInst; Facebook: facebook.com/JamesMadisonInstitute; Reporting: www.CapitolVanguard.org.
View Press Release in PDF Format:
“Options for Florida Going Forward under the PPACA” Press Release (PDF)