Florida cuts a deal on Obamacare Medicaid expansion

It’s really tough to say “no” when Uncle Sam shows up at your door with billions in federal money.  Florida Governor Rick Scott came into office as a dedicated opponent of ObamaCare, adamantly stating as recently as June that his state “is not going to expand Medicaid”… but on Wednesday he threw in the towel, as chronicled by the Tampa Bay Times:

Hours after the federal government agreed to grant Florida a conditional waiver to privatize Medicaid statewide, Gov. Rick Scott appears ready to endorse a plan to conditionally expand the health care program to about 1 million Floridians or more.

Scott previously has said that Florida cannot expand Medicaid unless the federal government approves the state’s plan to privatize the system.  Today, he got the waiver he sought.

Scott and other GOP lawmakers have repeatedly warned that Medicaid’s roughly $21 billion annual costs were consuming Florida’s budget and proposed the managed care plan to save money and improve care.

The plan Governor Scott wanted a waiver for doesn’t seem to have been working terribly well so far:

The privatization plan expands on a five-county pilot program that has been rife with problems. Critics worry for-profit providers are scrimping on patient care and denying medical services to increase profits. Some doctors have dropped out of the pilot program, complaining of red tape and that the insurers deny the tests and medicine they prescribe. Patients have complained they struggled to get doctor’s appointments.

Several health plans also dropped out of the pilot program, saying they couldn’t make enough money. Patients complained they were bounced from plan to plan with lapses in care. Nearly half of the 200,000 patients enrolled in the pilot have been dropped from at least one plan, federal health officials noted at one point during negotiations.

Lawmakers say they have fixed the pilot program’s shortcomings, with provisions including increased oversight and more stringent penalties, including fining providers up to $500,000 if they drop out. The measures also increase doctors’ reimbursement rates and limits malpractice lawsuits for Medicaid patients in hopes of increasing doctor participation in the program.

Sounds like it’s in fine shape to handle a million new Medicaid beneficiaries, courtesy of ObamaCare!

The feds are supposed to cover the cost of this Medicaid expansion for the first three years, but then the states begin picking up more and more of the tab, until they reach 10 percent of cost in 2020.  That’s assuming the federal government, which is on course to blow past $20 trillion in accumulated debt by the time Barack Obama leaves office, does not choose to “alter the terms of the deal,” as a particularly imposing government agent once put it to the manager of a certain cloud mining facility in The Empire Strikes Back.

Medicaid serves about 3.3 million people in Florida at the moment, so another million people will be roughly a 30 percent increase.  30 percent of current $21 billion annual cost that is “consuming Florida’s budget” is $6.3 billion.  When the state ends up covering 10 percent of that, it’ll add up to a cool $630 million – probably more, since these figures are unlikely to hold steady through 2020.  Prior to this expansion, Florida had very strict requirements for Medicaid eligibility, but one wonders if Governor Scott’s new high-rolling partners in Washington might have a few more words to say about that, down the line.  And some reports think the number of new beneficiaries from this expansion will be a lot more than the “1 million or more” figure cited by the Times above.  As in, nearly twice as many.

But there was mounting pressure on Scott to take Washington’s money, as the Tampa Bay Times reported earlier today:

A report released by two consumer groups Wednesday makes a pro-business case for Medicaid expansion in Florida, saying the infusion of federal money in the state would create 71,300 jobs and $8.9 billion in economic activity.

Most of those new jobs would be in the health care industry as an estimated 1.8 million people gain coverage through the Medicaid expansion, according to the report from expansion advocates Florida CHAIN and national health consumer organization Families USA. An earlier study done for the Florida Hospital Association estimated that the infusion of federal funds would add 56,000 jobs to the state.

The $8.9 billion figure is a calculation of the money trickling into the economy once people start getting health care. It represents everything from doctors using the revenue to upgrade their facilities to workers needing to take fewer sick days, said Families USA spokesman Bryan Fisher.

Refusing the expansion “would be an act of fiscal malpractice,” said Ron Pollack, executive director of Families USA.

“Every Floridian has a stake in this,” said Laura Goodhue, executive director of Florida CHAIN.

Advocates of the Medicaid expansion also think it will save money from the “cost shifting” losses that occur when hospitals are compelled to provide charity care to the uninsured, although there is considerable dispute over what the net savings will be.  The best-case scenario from the Kaiser Family Foundation estimates $1.3 billion over the next decade.

Governor Scott used to worry that Medicaid costs would balloon faster than the federal government’s projections.  He’d better hope he wasn’t right.

Update: A perceptively depressing point from Twitter correspondent @DrewMTips: What happens to this already huge Medicaid expansion when amnesty for illegal aliens hits?  How about after the prescribed period for the full-boat “path to citizenship” is completed?