State Economist Warns 'We Will Feel It' If Medicaid-Related Hospital Funds Are Lost

WLRN Public Media | By Rick Stone

Published April 21, 2015 at 6:41 PM EDT

TALLAHASSEE -- State House Republicans emerged from a closed-door meeting on Tuesday apparently still resolved to oppose expanding Medicaid for 800,000 low-income Floridians.

Meanwhile, the Senate, in an unusual workshop session to hash out the Medicaid problem and its implications for Florida's hospitals and its economy, was hearing from the state's chief economist that the House position threatens an economic catastrophe that begins with Florida's safety net hospitals.

Not expanding Medicaid could mean the end of billions of dollars in federal subsidies for hospitals that treat uninsured patients, economist Amy Baker told senators, and that could cause a general decline in economic activity beginning with layoffs and program closures at the safety net hospitals that rely on the money.

"This is a big enough change to the economy that we can see it. We will feel it. We will know it," Baker said.

But Baker said the Senate's Medicaid expansion plan, now being pitched to the federal Centers for Medicare and Medicaid Services, could eventually be a money-maker with its efficiencies and novel premium structure.

"You have generated enough money to pay the state's cost of entering this program and actually, with your proposal, you're generating a little bit of a surplus," she told the 40 Senators and about 100 other spectators in a Senate committee room.

Sen. Rene Garcia, the Miami Republican who chairs the Health and Human Services Appropriations Subcommittee, says Jackson Health Systems stands to lose more than $200 million a year if the federal hospital funding called the Low Income Pool goes away, as federal officials warn may happen if Medicaid remains unexpanded.

"There's only two things that can happen," Garcia explained. "Either you’re going to close certain programs. Or, you have to go back to the taxpayers and raise taxes. There's no other option."

Meanwhile, the House-Senate Medicaid standoff has delayed budget negotiations so much that Senate President Andy Gardiner now says reaching agreement by the scheduled adjournment on May 1 is now impossible.