Politics & Government

For Florida, caps on Medicaid could increase burden on local governments

Cancer survivor Margalie Williams and others show their support during March 2 rally in Miami for Save My Care bus tour, a two-month, cross-country trip focused on telling the stories of people who could lose their health insurance coverage if the law is repealed without an adequate replacement.
Cancer survivor Margalie Williams and others show their support during March 2 rally in Miami for Save My Care bus tour, a two-month, cross-country trip focused on telling the stories of people who could lose their health insurance coverage if the law is repealed without an adequate replacement. adiaz@miamiherald.com

Congress’s bill to repeal and replace the Affordable Care Act, unveiled late Monday, will choke off federal health care funds flowing to the state and force lawmakers to ration health care for the estimated 4.3 million Floridians who rely on Medicaid, the public health insurance program for low-income and disabled persons, advocacy groups reviewing the legislation said Tuesday.

The bill, called the American Health Care Act, calls for, among other things, a spending limit for each person enrolled in Medicaid beginning in 2019, with annual adjustments for medical inflation. Any amount spent above the cap would be at the state’s expense.

Under its current structure, Medicaid spending is open ended, with the federal government guaranteeing a 61 percent match for every dollar that Florida spends to fund the program. The AHCA, which will be voted on by two House committees this week, would end the guaranteed federal match and cap Medicaid spending at 2016 levels.

That’s a problem for Florida because the state’s spending rate for the program historically has been among the lowest in the nation, said Joan Alker, a researcher and Medicaid expert with Georgetown University’s Center for Children and Families.

To make matters worse, Alker said, the rate of Medicaid enrollment in Florida among disabled persons and low-income seniors — the most expensive populations to cover under the program — has risen faster than national averages.

“Florida should be especially worried about the caps,” Alker said Tuesday during a teleconference hosted by the Florida Philanthropic Network, a Tampa-based nonprofit and advocate of health insurance coverage expansion.

From 2006 to 2015, Alker said, Florida’s low-income elderly population — defined as seniors who earn less than $24,000 a year for an individual or $32,000 a year for a two-person household — grew by 25 percent compared with a national average of 14 percent.

And the rate of Floridians who qualify for Supplemental Security Income — a federal program that pays stipends to low-income people who are either 65 or older, blind, or disabled — also has outpaced the rest of the nation by 35 percent compared to a national average of 17 percent.

“These are folks who wind up on Medicaid and they’re very expensive,” Alker said. “The old are going to become even more expensive over time.”

It’s not just the elderly and disabled who could run up costs on Medicaid. New medical therapies, natural disasters and public health threats such as Zika could force Medicaid spending to rise unexpectedly in Florida, Alker said.

Ultimately, Medicaid spending caps could hurt counties as the state runs out of money to provide services and shifts the expense to local hospitals and governments, said Miriam Harmatz, a senior health attorney with Florida Legal Services, a nonprofit legal aid group.

“People’s needs don’t change,” she said, “just because the federal government caps its contributions.”

With a Medicaid spending cap, Harmatz said, state legislators would have few choices to control costs: they could limit enrollment, which would lead to waiting lists; cut services for beneficiaries; or reduce payments to hospitals and doctors under the program.

Once those options are exhausted, she said, local hospitals and county governments could be on the hook for providing care to uninsured and low-income residents.

“All of those costs for vulnerable populations go back to the counties,” she said.

Miami-Dade would be especially hard hit, she said. It had the second-highest uninsured rate in Florida before 2014 — the year that government subsidized health plans became available for eligible Americans through the ACA exchanges — and the county is home to Jackson Health System, the state’s largest safety net hospital system.

Lidia Amoretti, a spokeswoman for Jackson Health, said in a written statement that the AHCA contains additional funding for hospitals in the 19 states, including Florida, that did not expand Medicaid as provided for under the health law also known as Obamacare.

“The proposal would certainly help Jackson continue carrying out its historic mission,” Amoretti said. “But the proposal is in its early stages, and it’s impossible to predict the long-term overall impact until more details are developed about who would be eligible for coverage and able to afford it,” she said.

Alker called the funding for non-expansion states “token outreach”.

If Florida had expanded Medicaid eligibility under the ACA, an estimated 700,000 Floridians would have gained coverage — with the federal government contributing 100 percent of the cost of the new population and never less than 90 percent.

But Florida refused, leaving about $5 billion a year on the table. As a consolation, Alker said, the AHCA provides $2 billion a year for those states, which she calculated would amount to about $339 million annually for four years.

“It’s obviously far less than state would have gotten if they’d picked up the Medicaid expansion.”

Medicaid has a far reach in Florida, especially among children. The program provides health insurance coverage for 41 percent of the state’s children and funds half of all births in Florida, according to the health department.

Medicaid is the primary source of federal funding for Florida, making up 54 percent of the total received by the state.