Important Obamacare Senate Committee Meeting Tomorrow!
Tomorrow (Monday, March 4th) the Senate Select Committee on PPACA (Patient Protection and Affordable Care Act) will meet at 1:00PM and may make their decision on expanding Medicaid as part of implementing Obamacare. We need to call the following members of the committee tomorrow morning who are on the fence with expanding Medicaid.
Senator Joe Negron; (850) 487-5032
Senator Aaron Bean: (850) 487-5004
Senator Jeff Brandes: (850) 487-5022
Senator Anitere Flores: (850) 487-5037
Senator John Legg: (850) 487-5017
Senator David Simmons: (850) 487-5010
Tell them that expanding Medicaid will bankrupt Florida and diminish the quality of our heath care.
The Florida Legislature Should Reject the Expansion of Medicaid!
Two of the key components of funding and implementing Obamacare are the state-run Health Care Exchanges and the expansion of Medicaid. Neither of these two components is required by law and Florida Legislature can reject both. There have been conflicting projections on just what expanding Medicaid will cost the state of Florida and taxpayers. Many supporters of Obamacare are pointing out that the Federal government will pay 100% of the cost of expanding Medicaid and Florida taxpayers will have little expense. But, what are the real costs to the states to implement Obamacare through the expansion of Medicaid?
Florida’s Medicaid spending will explode
According to a forthcoming publication from The Heritage Foundation, Medicaid spending will increase dramatically as the federal match rate for the expansion population begins to drop and as more and more Floridians are enrolled in the program. The current Medicaid program covers approximately 3 million people and costs $21 billion of a $70 billion total budget. The expansion of Medicaid is projected to add another 900,000 people. When the individual mandate to obtain health coverage takes effect in 2014, many of the uninsured are likely to be swept up in outreach efforts. Although the cost of enrolling newly eligible individuals will be paid by the federal government, the cost of covering those previously eligible for Medicaid must be paid for under the current federal matching formula.
Medicaid harms the poor.
The Medicaid program is so badly broken that it actually harms the people it is intended to serve. Mountains of clinical literature show that many patients on Medicaid have poorer health outcomes than those with no insurance at all. The largest such study by far, conducted by surgeons at the University of Virginia, examined outcomes for 893,658 individuals undergoing major surgical operations from 2003 to 2007. It found that patients on Medicaid were 97 percent more likely to die in the hospital, after surgery, than those with private insurance, even when adjusting for age, gender, income, region, and health status. Medicaid patients were 13 percent more likely to die than those who were uninsured.
This is because the Medicaid program pays doctors and hospitals far less than private insurers do, leading many doctors to drop out of the program entirely. In 2008, the Virginia Medicaid program paid doctors 29 percent less than private insurers did. In states with expansive Medicaid programs, like California and New York, Medicaid pays doctors 62 and 71 percent less, respectively. When Medicaid patients can’t get predictable access to care from physicians, their cancers go undiagnosed and their heart conditions go unmanaged.
Medicaid’s access problems will get worse, as more doctors drop out.
According to the Urban Institute, there is considerable concern about whether there will be enough doctors to see the influx of new Medicaid patients. It seems unlikely there will be increases in permanent participation among privately practicing physicians with the temporary increase in federal payments for primary care physicians for two years. The biggest problem in Virginia will be in developing sufficient capacity in the southern and southwestern parts of the state. In these areas, enrollment increases will be the largest and provider shortages the greatest.
Will 900,000 people be denied coverage if Florida turns down the Medicaid expansion?
Studies that claim several hundred thousand Floridians will be denied coverage if the Legislature doesn’t expand Medicaid do not account for crowding out of private insurance. But Medicaid will end up replacing higher-quality, employer-sponsored health coverage for tens of thousands, if not hundreds of thousands, of Floridians. While these individuals will still have “coverage,” and therefore will not increase the ranks of the uninsured, the quality of their coverage will meaningfully decrease.
Coverage is not the same thing as care. Medicaid has the worst health outcomes of any insurance program in the developed world. While Medicaid recipients have a card saying that they have health insurance, they have very poor access to physicians, making it hard for them to get care when they need it. Expanding Medicaid will create a cascade of unintended consequences for Florida taxpayers and citizens.
Medicaid’s undercompensated care is a bigger problem than uncompensated care for the uninsured.
In policy circles, there is much discussion of the “uncompensated care” problem, whereby the uninsured use emergency rooms to get routine care. But the problem of undercompensated care—that Medicaid and Medicare do not pay hospitals enough to cover their beneficiaries’ costs—is a larger one, and contributes to an equally large amount of inappropriate emergency room use. In Ohio in 2010, for example, hospitals spent $1.1 billion on charity care, but lost $1.3 billion on Medicaid patients.
Expanding Medicaid will expose Florida to immense amounts of fraud and waste.
Official federal estimates show that at least 10 percent of Medicaid payments are fraudulent. Many prosecutors believe that the figure is closer to 30 percent. Unfortunately, health-care providers often aggressively resist efforts to police fraud and waste because excess Medicaid spending often accrues to their benefit.
In North Carolina, State Auditor Beth Wood, a Democrat, recently completed an auditthat found that the state’s Medicaid program endured $1.4 billion in cost overruns each year, including $375 million in state dollars. As a result, North Carolina has decided not to expand its Medicaid program. Before considering a Medicaid expansion, Florida should conduct a similar audit of the program and demand flexibility for reform.
Florida will be exposed to higher Medicaid costs when Washington recalculates its matching payments.
While the Affordable Care Act covers most of the cost of the Medicaid expansion in the near-term, it is almost certain that, in outlying years, the federal government will attempt to reduce entitlement spending by reducing its matching payment for the expansion. Indeed, President Obama proposed doing just that in his fiscal year 2012 budget, which would have reduced Medicaid spending by $100 billion over ten years.
In addition, many states have made extra money from their Medicaid programs by taxing providers and insurers for participating in the program. These accounting gimmicks will almost assuredly be prohibited in future federal budget negotiations, leaving states on the hook for more Medicaid spending.
By rejecting the Medicaid expansion, Florida encourages other states to do the same, reducing waste of taxpayer dollars.
Many states still are deciding whether or not to expand their Medicaid programs under the ACA. A principal justification that Medicaid advocates use is that declining to expand Medicaid means that state taxpayer dollars go to fund Medicaid in other states.
But the large “blue states” that have gone along with the Medicaid expansion will see relatively little in increased federal spending because they had already expanded their programs beyond the ACA mandate. Indeed, only half of the funds dedicated to the Medicaid expansion are being spent outside the South. Large “red states,” on the other hand, where the ACA’s Medicaid dollars are directed, have mostly rejected the expansion.
Florida, as a large swing state, will set an example to other states that are deciding what to do about the Medicaid expansion. Ten states have already rejected the expansion, with 20 others undecided. If Florida joins these ten, it will do much to limit spending of Virginia taxpayer dollars by other states.
Medicaid will worsen the cycle of dependence and harm the economy.
As noted above, a significant amount of Medicaid spending goes to fraudsters. All Medicaid spending takes money out of productive sectors of the economy and re-routes it into existing health care providers. Most importantly, Medicaid imposes a huge disincentive on the poor to find work.
If Florida chooses not to expand its Medicaid program, able-bodied adults who seek work and who successfully cross the poverty line should have the option of private insurance. This should be the focus of the Florida legislature’s negotiations with Washington – seeking a united front with other states. This is a morally superior approach, one that will increase the incentives for employment and stimulate the economy through privately-generated income.