Florida Grapples with Medicaid Expansion Decision

Published March 8, 2013

Florida’s state legislators are debating whether to expand Medicaid eligibility as called for under President Obama’s health care law, with Republican Gov. Rick Scott signaling his openness to raising the eligibility cap, but holding off on taking the step thus far.

Exchanging Control for Funding

In January 22 testimony before Florida’s Select Senate Committee on the health care law, Cato Institute Director of Health Policy Studies Michael F. Cannon warned legislators they should not implement the Medicaid expansion or the health insurance exchange mandated under Obama’s law.

“The moment Florida implements those programs, it cedes even greater control over its health care sector and the state’s destiny to the federal government,” Cannon said, noting Washington is already more than $16.4 trillion in debt resulting from unfunded entitlement liabilities.

Massachusetts Institute of Technology professor Jonathan Gruber agreed with Cannon that Florida should let HHS manage its exchange. With regard to Medicaid, Gruber noted the temptation in Washington’s promise to fund 100 percent of states’ costs from expanded eligibility for three years before phasing federal funding down to 90 percent.

“It’s too good a deal to pass up,” Gruber told the Florida Senate committee.

Medicaid Means Fewer Subsidies

According to Jonathan Ingram of the Illinois Policy Institute, however, Florida citizens would be better off without the Medicaid expansion.

“Many of the people who would be dumped into Medicaid under ObamaCare will actually qualify for federal subsidies to buy private insurance,” Ingram said. “But if Florida expands Medicaid eligibility, they lose those subsidies and their only option is Medicaid. Why would the state voluntarily take on some of the financial responsibility of enrolling them in Medicaid?”

Ingram suggests the state will see many more costs and less freedom to tailor their program should they expand.

“More than 40 percent of Florida doctors have stopped taking new Medicaid patients altogether,” Ingram explained. “Florida is in the middle of implementing major statewide reforms to improve the program, but adding millions of additional people will overload the program and ultimately hurt the most vulnerable.

“If that weren’t bad enough, Florida lawmakers can’t expect the federal government to keep up its end of the bargain,” Ingram added. “President Obama has already proposed shifting a greater share of the costs onto the states, both in his 2013 budget and as part of the debt ceiling and fiscal cliff negotiations.”