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Thu January 10, 2013

Estimated Costs Drive Debate As Florida Weighs Medicaid Expansion

Originally published on Thu January 10, 2013 5:26 pm

Florida and several other states are wrestling with a decision: whether to expand Medicaid.

When the Supreme Court upheld the Affordable Care Act last year, the court said states could opt out of that part of the law. But it's key. It would provide coverage to millions of low-income Americans who currently have no health insurance.

Florida Gov. Rick Scott says he's concerned about how much expanding Medicaid would cost. But others charge the governor is exaggerating.

No governor fought harder against the Affordable Care Act than Scott. With President Obama's re-election, Scott says he now accepts that it is "the law of the land."

But in an interview this week with a Jacksonville TV station, Scott talked about the area that still troubles him: Medicaid expansion.

"Once you put somebody in a program, you can't undo it," he said.

Under the Affordable Care Act, more than 21 million people across the country currently without insurance could be covered by Medicaid. They "could" because the Supreme Court ruled that for states, expanding Medicaid is optional.

The Obama administration worked to make it an attractive option. Under the law, the federal government would pick up the entire cost of insuring new Medicaid recipients for the first three years and 90 percent of the costs after that.

Despite that, some states, like Texas, say they have no plans to expand Medicaid. That's also been Scott's position in Florida. He says that's because of its potential impact on the state's budget.

"The Florida Agency for Health Care Administration put out a report that said it's going to cost $26 billion over 10 years. There's going to be other studies. It's all tied to what assumptions you have," he says. "But here's what we know: It's not free."

But that estimate appears to be greatly inflated. Since the Scott administration first released those numbers last month, they have been panned by health care analysts and economists for ignoring the new, larger share of Medicaid costs being picked up under the Affordable Care Act by the federal government.

The governor's numbers are at least four times higher than estimates compiled by independent health care analysts and the Florida Legislature.

Karen Woodall, who heads the Florida Center for Fiscal and Economic Policy, says that rather than costing the state $26 billion, some independent estimates show Medicaid expansion may actually help Florida save money.

"And that's because they are calculating the cost benefit of expansion of Medicaid in that we would be saving money that wouldn't have to be spent taking care of people who don't have insurance," she says.

According to a report this week in Health News Florida, Republicans in the state Legislature last month alerted Scott's staff that his Medicaid expansion numbers were faulty. But Scott continued to use them, even in a meeting this week with Health and Human Services Secretary Kathleen Sebelius.

That's troubling to Rep. Mark Pafford, a Democrat who helps oversee health care spending in the Statehouse.

"To me, it suggests that the governor's not having an honest conversation — not only with the folks who are going to depend on the Affordable Care Act, but also with major officials in Washington, D.C.," he says.

At first, Scott's office stood by his numbers, saying they were one of a set of different cost estimates he would consider going forward. But on Wednesday, the Republican chairman of Florida's House Appropriations Committee joined the criticism. A few hours later, the Scott administration released a new study that downgraded the cost of expanding Medicaid to $3 billion over 10 years — only about one-tenth of his original estimate.

Ultimately, the decision about expanding Medicaid may be made, not by Scott, but the state Legislature. Florida's House and Senate have set up special committees to begin working on the issue.

Woodall says Medicaid expansion would bring $20 billion in federal health care funds to Florida over the next decade — a cash infusion that would help the economy, especially small businesses that rely on low-wage workers.

"So I think, ultimately, the Legislature is going to see that this is a benefit to Florida and they'll move forward with it," she says.

Scott's decision then would be whether to sign it.

Copyright 2013 National Public Radio. To see more, visit http://www.npr.org/.

Transcript

AUDIE CORNISH, HOST:

From NPR News, this is ALL THINGS CONSIDERED. I'm Audie Cornish.

MELISSA BLOCK, HOST:

And I'm Melissa Block.

At this moment, several states are wrestling with a decision: Whether to expand Medicaid. When the Supreme Court upheld the Affordable Care Act last year, it said states could opt out of that part of the law. A Medicaid expansion would provide coverage to millions of low-income Americans who currently have no health insurance. And in Florida, that's led to a big fight over numbers. Governor Rick Scott has said the price tag is too high.

But as NPR's Greg Allen reports from Miami, others in the state say Scott is exaggerating the cost and that the move could ultimately save money.

GREG ALLEN, BYLINE: No governor fought harder against the Affordable Care Act than Florida's Rick Scott. With President Obama's re-election, Scott says he now accepts that it is, in his words, the law of the land. But in an interview this week with a Jacksonville TV station, Scott talked about the area that still troubles him: Medicaid expansion.

GOVERNOR RICK SCOTT: Once you put somebody in a program, you can't undo it.

ALLEN: Under the Affordable Care Act, more than 21 million people across the country currently without insurance could be covered by Medicaid. Could, because the Supreme Court ruled that for states, expanding Medicaid is optional.

The Obama administration worked to make it an attractive option. Under the law, the federal government would pick up the entire cost of insuring new Medicaid recipients for the first three years, and 90 percent of the costs after that. Despite that, some states, like Texas, say they have no plans to expand Medicaid. That's also been Florida Governor Scott's position. He says because of its potential impact on the state's budget.

SCOTT: The Florida Agency for Healthcare Administration put out a report that says it will cost $26 billion over 10 years. There's going to be other studies. It's all tied to what assumptions you have. But here's what we know: It's not free.

ALLEN: But that estimate appears to be greatly inflated. Since the Scott administration first released those numbers last month, they've been panned by health care analysts and economists for ignoring the new, larger share of Medicaid costs being picked up under the Affordable Care Act by the federal government.

The governor's numbers are at least four times higher than estimates compiled by independent health care analysts and the Florida legislature.

Karen Woodall heads the Florida Center for Fiscal and Economic Policy. Rather that costing the state $26 billion, she says some independent estimates show Medicaid expansion may actually help Florida save money.

KAREN WOODALL: And that's because they are calculating the cost-benefit of expansion of Medicaid, in that we would be saving money that wouldn't have to be spent taking care of people who don't have insurance.

ALLEN: According to a report this week in Health News Florida, Republicans in the state legislature last month alerted Governor Scott's staff that his Medicaid expansion numbers were faulty. But Scott continued to use them, even in a meeting this week with Health and Human Services Secretary Kathleen Sebelius.

That's troubling to Representative Mark Pafford, a Democrat who helps oversee health care spending in the State House.

STATE REPRESENTATIVE MARK PAFFORD: To me, it suggests that the governor is not having an honest conversation, not only with the folks who are going to depend on the Affordable Care Act, but also with, you know, major officials in Washington, D.C.

ALLEN: At first, Scott's office stood by his numbers saying they're one of a set of different cost estimates he'll consider going forward. But yesterday, the Republican chairman of Florida's House Appropriations Committee joined the criticism. A few hours later, the Scott administration released a new study that downgrades the cost of expanding Medicaid to $3 billion over 10 years, nearly one-tenth of his original estimate.

Ultimately, the decision about expanding Medicaid may be made, not by Scott, but the state legislature. Florida's House and Senate have set up special committees to begin working on the issue.

Karen Woodall says Medicaid expansion would bring $20 billion in federal health care funds to Florida over the next decade; a cash infusion that would help the economy, especially small businesses that rely on low wage workers.

WOODALL: So I think ultimately the legislature is going to see that this is a benefit for Florida and they'll move forward with it.

ALLEN: Governor Scott's decision then would be whether or not to sign it.

Greg Allen, NPR News, Miami. Transcript provided by NPR, Copyright National Public Radio.

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