Expanding Medicaid could save state millions, report says
Published: Thursday, November 15, 2012 at 1:33 p.m.
Last Modified: Thursday, November 15, 2012 at 1:33 p.m.
Florida could save as much as $100 million a year by expanding Medicaid coverage as part of the Affordable Care Act, according to a study released Thursday by Georgetown University's Health Policy Institute.
Florida's expansion of Medicaid would cover an estimated 800,000 to 1.3 million of the state's currently uninsured people, without incurring any additional costs, said a media release on the study. It would cover people with incomes at or below 133 percent of the federal poverty level, which is $25,390 for a family of three.
"It's very high stakes for Florida's hospitals and health-care systems," said Joan Alker, the author of the study and the co-executive director of Georgetown's Health Policy Institute Center on Children and Families. "If the state extends Medicaid, it will result in state savings in safety net programs as well as better, more cost-effective care for Floridians."
Earlier this week, Gov. Rick Scott expressed openness to applying the Affordable Care Act in Florida. Previously he was opposed to it.
Alker said Florida hospitals especially stand to benefit from Medicaid expansion, since covering more people will allow for preventative care, which generally costs less than emergency room care.
Alker explained in a briefing Thursday afternoon that the Affordable Care Act reduces Disproportionate Share Hospital (DSH) funding — in other words, funding for hospitals caring for indigent patients — by as much as $640 million annually.
The provision for the cuts was made before states' expansion of Medicaid became optional.
DSH funding cuts to Shands at the University of Florida in Gainesville and Shands Jacksonville would result in a loss of about $25 million-$26 million, according to Dr. David Guzick, president of the UF&Shands Health System and senior vice president for health affairs.
But the idea is that the Medicaid reimbursement would offset those cuts, Guzick continued. "It's hard to know where you end up … one goes up and one does down … but this is so early in the game, you don't really know where the pieces will fall."
"At the end of the day, I would hope and I would predict that the Legislature would do the right thing for the citizens of Florida and that the facts will speak for themselves," Guzick said. "They're going to figure out that the state will be better off."
Medicaid expansion under the ACA means that the federal government would pick up 100 percent of the cost for the new Medicaid recipients from 2014 to 2016, tapering to 90 percent by 2020.
"This is one of the biggest economic stimulus endeavors we've seen in Florida for quite some time," said James Zingale, the research director of the Safety Net Hospital Alliance of Florida, which represents Florida's 15 safety net hospital systems that treat about 40 percent of the state's Medicaid patients and a large number of its uninsured patients.
The alliance did a county by county analysis of estimated federal monies if the state agrees to Medicaid expansion. Marion County would get over $556 million.
Experts say the infusion of federal cash will be good for the overall state economy, by generating revenue in retail and commercial sectors.
Guzick also predicts that insurance premiums would go up less, as more and more people are insured through Medicaid.
Ultimately, though, it's people — particularly the 4 million uninsured adults in Florida — whom experts believe will benefit. Studies have shown reduced mortality and improved health status because of Medicaid extension.
Employed people without health insurance will no longer have to hunt for private coverage.
"The good thing is we have a situation where all those people will have more access and a means for paying for it," said Guzick. "And the federal government has worked out a mechanism to use dollars that were devoted elsewhere and redeploy them to this service."
Alker doesn't anticipate cuts to those Medicaid funds. That would only undermine the momentum in Washington toward the "culture of coverage," she said. "After the election, the president has a very strong incentive to protect this money."
Alker's report also underlines how Medicaid expansion to currently uninsured parents would benefit the state's uninsured children.
"We know from research, when you cover parents, you cover children," said Alker. "Parents are healthier and the whole family is more likely enrolled in coverage."
Florida has an estimate 579,000 uninsured children.
In a separate provision of the ACA, more than 100,000 of those kids — aged 6-18 — will become eligible for Medicaid expansion. Kids currently enrolled in Medicaid would continue to receive benefits at least through 2019.