Florida Grapples With How To Comply With Federal Healthcare Law

Nov 16, 2012

After more than two years of opposition to the federal healthcare overhaul law, Florida’s Republican leaders are now saying they plan to take it up in the upcoming legislative session. That’s a reversal of course for many Republicans who were staunch opponents of the law, including Governor Rick Scott. 

The state’s change of tone does not mean Florida will be ready to meet looming deadlines, and it still leaves the fate of several of the law’s programs and provisions up in the air.

Florida lawmakers will have to decide whether to set up online insurance marketplaces, and whether to expand the state’s Medicaid program for low-income people. Both programs are part of the federal Affordable Care Act or ObamaCare. For more than two years, Florida Republicans have rejected the programs as government intrusion, and overreach. Incoming Senate President Don Gaetz was one of them. But he now says the U.S. Supreme Court, and the voters have spoken. And the healthcare overhaul is the law of the land.

“And now on the 20th of November, Speaker Weatherford and I will take oaths to preserve, protect and defend the Constitution and the laws of the United States. And this is a law that has been deemed Constitutional. And we will faithfully implement it. But we will do so in a way that provides the most choice and the least cost to Floridians,”  he said.

Florida now has until December to tell the federal government whether it will create its own health insurance exchange. But state leaders say they won’t be ready.

“We should be looking out for our consumers and we should be looking out for our state and doing what’s best for them. The problem is, there are hundreds of unanswered questions about the implementation of the Affordable Care Act," Incoming Florida House Speaker Will Weatherford told reporters earlier in the week. 

Gaetz and Weatherford have sent a letter to the federal department of Health and Human Services requesting more information on the exchanges and more time.

If states don’t set up their own exchanges, the federal government will do so in their place.  But Florida may already have two models for a new exchange: Florida Health Choices, an online market place for individuals and small businesses; And Florida Healthy Kids, which is used for the state’s Medicaid program for children. Both are online marketplaces where consumers can shop and compare plans. That’s just what’s envisioned for the federal health insurance exchanges. And Senator Gaetz says Florida is seriously considering Florida Health Choices and Healthy Kids as vehicles to establishing a state-federal partnership exchange that would comply with federal law:

“We think that there’s a possibility at least, that through the existing exchanges we’ve already set up, that a partnership with the federal government could result in some cost savings and some additional options for Florida families.”  

Meanwhile, state leaders are still mulling over whether to expand its  $21 billion Medicaid program to cover low-income people who earn up to 133 percent of the poverty line. The U.S. Supreme Court ruled that expansion is optional for states, and Florida Legal Services’ attorney Ann Swerlick says the ruling blew a big hole in the healthcare law, “and that’s because the lowest-income people, the way the law is currently structured, they’re not eligible to go out on the exchanges and get premium assistance."

But state officials remain concerned about the financial impact of adding more people to the state’s Medicaid program. For the first few years of the expansion, the federal government would shoulder all of the additional cost. The support drops to about 90 percent with the state picking up 10 percent in the out years. And that’s something that concerns researchers like Thomas Perrin, who works at Florida’s James Madison Institute, a conservative-leaning think tank:

“It’s almost a bait-and-switch, to get more states onboard I think. I think more and more states that go along with that are going to have an extremely difficult time keeping up with the increased costs of Medicaid once the feds start removing some of the help they’re going to provide initially," Perrin said.

State estimates put the cost at about $500 million a year by 2020 to support another two million Floridians who would be eligible for the program under the expansion. But other reports, like a recent study from Georgetown University, has found that the state could actually save money.  Incoming House Speaker Weatherford says, there are still too many unknowns.

“I’ll give you an example: There are some people who are asking, if you want to opt in to the expansion do you have to do it universal across all lines? Does it have to be 133 percent for every person who qualifies for Medicaid? Or can you go to 120 percent or 115 percent?”   

Another big issue with Medicaid is doctor reimbursement rates. Many physicians don’t take Medicaid patients because current reimbursement rates are so low, they lose money. The law gives primary care doctors a pay increase, but that’s only for the first two years. Meanwhile, Florida hospitals are on pins and needles, because under the law, they agreed to take rate cuts in exchange for getting more people insured. Hospitals and other caregivers could get burned if Florida doesn’t expand Medicaid.

“Our healthcare delivery system is going to be in a world of hurt without having that funding and not doing a Medicaid expansion," said Florida Legal Services' Ann Swerlick.

Meanwhile, Governor Rick Scott has submitted a letter to the federal government asking for more information on both the Medicaid expansion and the health insurance Exchanges. Scott says he wants to sit down with the federal government and negotiate.