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State Tab for Affordable Care Act Hard to Predict

By: Jim Saunders, The News Service of Florida
By: Jim Saunders, The News Service of Florida

THE CAPITAL, TALLAHASSEE, Aug. 15, 2012

Jim Saunders, The News Service of Florida

Gov. Rick Scott and Republican legislative leaders have long argued that the federal health overhaul would drain too much money from Florida's budget.

But as a group of state analysts met Tuesday, it became clear that Florida's additional Medicaid costs from the federal Affordable Care Act are difficult to pinpoint.

The analysts are expected to issue a report, possibly as soon as Wednesday, forecasting how the federal law would affect costs of the state Medicaid program --- including an expansion of Medicaid eligibility that Scott has already said Florida will not carry out.

Draft data presented during Tuesday's meeting gave something of a worst-case scenario, with the state seeing $394.5 million in potential costs during the 2013-14 fiscal year and $1.1 billion in costs during fiscal 2020-21. But the analysts' report likely will show lower costs, and in one major area will describe projected costs as "indeterminate."

The analysts mulled issues such as how many Floridians would sign up for Medicaid if the state expanded eligibility and how soon they would enter the program; what the effect of the law will be on people who are already eligible for Medicaid but are not enrolled; and what the effect would be on people who currently have private insurance but would find themselves eligible in the future for Medicaid.

The draft data, for example, showed that most of the additional costs during 2013-14 were expected to come from already-eligible people starting to sign up for Medicaid. That assumption stemmed, at least in part, from the Affordable Care Act's requirement that most Americans have insurance coverage in 2014 or pay financial penalties.

But Amy Baker, coordinator of the Legislature's Office of Economic and Demographic Research, said low-income people are exempted from the financial penalties. She said about 20 percent of already-eligible people do not participate in Medicaid, and it is unclear how many would enter the program because of the Affordable Care Act --- prompting the analysts to agree that the costs of such an influx are indeterminate.

"We don't know what would cause a behavioral change to make them come into the program,'' Baker said.

The Affordable Care Act, which President Obama and Congress approved in 2010, is aimed at spurring health coverage for most Americans and would use Medicaid to help meet that goal. The law, in part, would expand eligibility criteria to include many childless adults who don't currently qualify and also would increase income thresholds to help more people in other groups qualify.

The federal government would pay all of the costs of expanded eligibility during the first few years and eventually would pay 90 percent of the costs. If Scott sticks with his decision to shun the expansion, Florida would forgo billions of dollars a year in federal funds that would help pay for it.

Florida has varying qualification levels in the Medicaid program, based on factors such as whether beneficiaries are children, disabled or pregnant. But as a basic example, children ages 6 through 18 can qualify if their family incomes are up to 100 percent of the federal poverty level. The Affordable Care Act would set a higher threshold of 133 percent of the federal poverty level, and analysts say a nuance in the law actually would allow people to qualify up to 138 percent.

In a legal challenge spearheaded by Florida, the U.S. Supreme Court in June upheld the constitutionality of most of the Affordable Care Act. But it allowed states to choose not to go along with the Medicaid expansion, which Florida and others contended was too coercive.

Scott has repeatedly said Florida will not expand eligibility, but the analysts are trying to sort out the potential costs to present to Scott and lawmakers.

If the eligibility expansion occurred, for example, the analysts tried to pinpoint how fast additional beneficiaries would enroll in Medicaid. They said people might sign up quickly if they need health care and that enrollment then could taper off.

"This is really hard to predict,'' Jane Johnson, a health adviser to Scott, said at one point.

Separate from the eligibility issues, the analysts agreed that part of the Affordable Care Act will require increased pay next year for physicians who provide primary-care services to Medicaid patients. Medicaid payment rates will be brought in line with significantly higher rates paid by the Medicare program.

"I think that that's something the state will have to do,'' said Eric Pridgeon, the top staff member on the House Health Care Appropriations Committee. "It's not part of the Supreme Court decision."

But the long-term funding of that requirement also remained in question. The law calls for the federal government to pay the additional physician costs for two years. The analysts said, however, it is unclear whether the state would help pay for the increase starting in 2015.


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