News Column

Medicaid Expansion Could Cost Florida $8.9 Billion Over 10 Years

Nov 28, 2012

John Dorschner


Florida's lawmakers appear to be facing a choice of adding comparatively few people to its Medicaid rolls at considerable cost or adding a lot more people for not much more money, according to a study by a Washington study group released this week.

The study by the Kaiser Commission on Medicaid and the Uninsured focused on the critical issue about what will happen to states if they choose or reject the Medicaid expansion under the Affordable Care Act.

The study showed that if Florida accepts Medicaid expansion, it will cost the state about $8.9 billion over 10 years to insure an extra 1.6 million persons in the state-federal insurance for the poor.

If Florida opts out of the expansion -- as the U.S. Supreme Court allows states to do -- the state's Medicaid enrollment will still go up, by about 370,000 persons, with an added cost to the state of about $3.5 billion over 10 years, according to the Kaiser analysis.

That's because many provisions of Obamacare will make it easier for people to apply and qualify for Medicaid, said Rachel Garfield, a Kaiser researcher. One example: Persons applying for insurance through the new exchanges will be directed to Medicaid if their income is below a certain level. Garfield said most of the persons added to the rolls are likely to be children.

Considering that this group will be added with or without expansion, the additional cost of expansion will be a net of about $5.4 billion over 10 years to cover an additional 1.2 million people, compared to the $3.5 billion to cover 370,000, according to the Kaiser analysis.

The reason for the per-person cost discrepancies is that the federal government will pay 100 percent of the expansion costs for the first three years, sliding down to 90 percent of costs after 10 years. Those added outside expansion, will be paid at the regular rates, in which the feds pay about 60 percent and the state 40 percent.

The Kaiser study said that expansion will save money in other areas, about $1.3 billion over 10 years in Florida because of reduced payments to hospitals and other healthcare providers to support their services to the uninsured.

That means the net additional costs of Medicaid expansion will be about $4.1 billion over 10 years, the study concluded.

Gov. Rick Scott has warned repeatedly that Medicaid expansion could be too expensive for Florida in these tight budget times. Last summer, he was reported to have said on several national television shows that Medicaid expansion through Obamacare would cost Florida about $1.9 billion a year -- far higher than the Kaiser figures.

This week, Scott's office said the exact costs are still being worked out. Spokeswoman Jackie Schutz said more information should become available when state government has an estimating conference on the Affordable Care Act on Dec. 10.

Source: (c)2012 The Miami Herald. Distributed by MCT Information Services.

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