Hospitals will lose out if Florida stands firm on Medicaid
By Lloyd Dunkelberger
From the Herald-Tribune
If Florida refuses to expand Medicaid under the new federal health care law, hospitals could end up the biggest losers.
The potential financial loss will come to an industry that over the last two years has seen more than $700 million in state budget cuts, including a 5.6 percent Medicaid rate cut that cost $235 million this year.
Additionally, as part of the Affordable Care Act, the federal government will be phasing out the “disproportionate share” payments to the states that compensate hospitals that have larger numbers of uninsured patients.
The idea is that with the expansion of Medicaid and private insurance under the ACA, the hospitals will not need as much financial support for “uncompensated” care.
But in Florida, it would mean the loss of more than $200 million in disproportionate payments, without an offset by an expanded Medicaid program for the poor and disabled.
More financial problems loom with expected cutbacks in Medicare, the federal health care program for the elderly.
Any changes in Medicare are amplified in Florida, the state with the highest percentage of Medicare recipients and where nearly one out of every five residents depends on the program.
With pending changes, including efforts to pay for the federal health care law and to trim federal spending, the Florida Hospital Association projects Medicare in Florida could be cut by as much as $15.6 billion during the next decade.
Bruce Siegel, head of the National Association of Public Hospitals and Health Systems, calls it a “perfect storm” for the state’s safety-net hospitals that care for Florida’s sickest and neediest residents.
“There’s no good news here,” said Siegel, the former chief executive of Tampa General. “It will not be sustainable.”
Ultimately, Siegel and other hospital advocates contend, the cost of treating uninsured patients will be shifted to paying patients and taxpayers who support local hospitals, like Sarasota Memorial.
“The patients will wind up in the emergency rooms. They will be sicker because they will have delayed getting care, so their problems just get worse,” Siegel said.
Gov. Rick Scott, a former private hospital executive, has made it clear that he does not favor an expansion of the Medicaid program — made optional in the U.S. Supreme Court’s landmark ruling on the health care law.
Although the federal government will pay all of the expansion costs in the first three years and more than 90 percent in subsequent years, Scott said the state cannot afford the expansion.
Critics say opting out of the expansion — which would provide coverage to Floridians making less than 133 percent of the federal poverty level or about $31,000 for a family of four — could be disastrous for the Sunshine State, particularly for the hospitals.
They say it will exacerbate the problem of uncompensated care in a state that has the third highest percentage of uninsured residents in the country.
“It’s so counterproductive to think that we would not be a part of the Medicaid expansion,” said state Sen. Nan Rich, D-Weston, a member of the Senate budget committee that oversees health care spending in the state.
Florida is already shortchanged on its disproportionate share funding, Rich said. For example, while Florida collects a little more than $200 million a year, Texas, another state that is expected to reject Medicaid expansion, received nearly $1 billion in 2011.
The Medicaid expansion provides a way for Florida to recapture more of that federal funding that is now flowing to other states, Rich said.
“The money will go somewhere else if doesn’t go to Florida — where it belongs,” she said.
The Kaiser Commission on Medicaid and the Uninsured estimates that Florida could receive as much as $24 billion in federal funding from the Medicaid expansion from 2014 to 2019, providing coverage to more than 1 million Floridians. It would cost the state $2.5 billion in matching funds.
Despite the court ruling, the future of federal health care law remains in doubt. The outcome of the presidential and congressional elections in November could make it moot — assuming a Republican victory will lead to a repeal of the law.
If the law remains in place, Scott’s opposition to the Medicaid expansion is not the final word in Florida. Legislative leaders will craft the next state budget — although their decisions will be subject to the governor’s veto.
Thus far, lawmakers have left the door somewhat open on the future of the health care law in the state. They have voiced support for setting up insurance exchanges in the state — which Scott opposes. They say they will look carefully at the Medicaid expansion, although they, like Scott, have expressed concerns about the rising cost of the overall program, which now totals more than $21 billion a year in Florida.
Incoming Senate President Don Gaetz, R-Niceville, said lawmakers would be working with Scott “to evaluate various options before any decisions are made.”
“Specifically, Florida has choices regarding the establishment of an exchange and about the expansion of Medicaid,” Gaetz said. “We are continuing to study various options.”
If the law remains in place, Rich said she expects the majority of states will eventually embrace its financial benefits. She noted the same thing happened after the federal government created the original Medicaid program in the 1960s: it took years before all the states decided to participate, with Arizona being the last state to join in 1982.
“I believe it will be the same with this,” Rich said of the federal health care law. “Ultimately, all the states will realize how destructive it is not to be a part of it and draw down the money that their taxpayers have paid to the federal government.”
For the original: http://politics.heraldtribune.com/2012/07/14/hospitals-will-lose-out-if-florida-stands-firm-on-medicare/
