Medicaid Costs Set To Soar

As the coronavirus pandemic rages, sickening more than 1.2 million people in Florida and killing 21,000, state lawmakers soon will be dealing with another stunning number.

The cost of Medicaid, the health coverage relied on by a projected record 4.6million lower-income and laid-off Floridians, is skyrocketing.

It will demand another $1.2 billion in state taxpayer money next year, state analysts say.

With anticipated tax collections down sharply because of the economic fallout from the virus, Florida's legislative leaders say cuts are needed to keep state spending in balance.

But health care advocates fire back by questioning how policymakers can even consider cutting health care with the pandemic raging on.

"We've never had a recession before that was caused by a health care crisis," said Justin Senior, chief executive officer of the Safety Net Hospital Alliance of Florida, which includes 14 hospital systems in the state's biggest urban areas.

Lawmakers begin committee hearings next month, making their first attempts to wrap their arms around the state's staggered finances. The two-month legislative session begins in March.

"This is very different from what the standard playbook is for the budget," Senior said. "And I don't think anyone on either side of the aisle wants to cut health care workers, patients or health care facilities in the midst of a pandemic. That is a difficult spot we are hopeful they are trying to avoid."

Reducing state payments to hospitals that treat Medicaid patients often is deployed as a cost savings by lawmakers looking to belt-tighten. But Senior said forcing hospitals to slash costs and lay off frontline health care workers makes no sense right now.

Florida is among only 12 states that have not expanded Medicaid under the 2010 Affordable Care Act, a signature accomplishment of President Barack Obama that brings billions of additional federal dollars to states that provide health coverage to more residents.

When now-U.S. Sen. Rick Scott was the state's Republican governor, he led opposition to Medicaid expansion, aided by GOP leaders in the Legislature.

Even without expansion, Medicaid is growing, and spending for the year ahead is positioned to absorb more than one-third of the state's current $92-billion budget. State economists also predict that lawmakers will face about a $2billion budget shortfall, making Medicaid an even bigger target for cuts.

Close to 4.6million Floridians are projected to be on the state and federally funded Medicaid program next year, an increase of 20%, or almost 775,000 people, since pre-pandemic levels in 2019-20.

The cost of the program will mushroom to $32.6 billion next year, with Florida lawmakers on the hook for $1.2 billion in additional state spending.

The demand for dollars is spiking now because even with a rising number of Floridians seeking coverage in 2020, this year's Medicaid budget has run a surplus because Congress responded to the pandemic by agreeing to a one-time boost in federal money pouring into the program.

But that extra cash is set to expire, forcing Florida to face a big hit next year. Many health professionals say they still think Washington will come through again with enhanced aid – helping states avoid wholesale cuts.

But the $900 billion stimulus package approved Monday by the U.S. House and Senate includes no direct payments for state and local governments facing massive budget holes. President-elect Joe Biden, though, says he'll fight for another round of relief following his Jan. 20 inauguration.

Still, state Senate President Wilton Simpson, R-Trilby, who is recovering after testing positive this month for COVID-19, has taken a flinty eyed approach to the financial crisis facing the state.

In November, he told fellow lawmakers, "We will have less revenue; therefore, we will have less government."

While the enhanced federal money for states dealing with rising Medicaid demands came with some strings attached – like maintaining existing services for those getting coverage – that requirement also looks poised to go away next year.

Anne Swerlick, a senior policy analyst and attorney with the Florida Policy Institute, said many people fear that some heavily used Medicaid services could go on the chopping block.

Some are considered optional but provide care to thousands of elderly and disabled Floridians and others recovering from costly health events, such as transplants, while other services are there to help frail residents stay in their homes rather than go to nursing facilities.

"Medicaid is doing exactly what it was set up to do: be a safety net," Swerlick said. "When times are bad, we shouldn't be surprised that enrollment swells. We should be prepared to deal with this because it's a lifeline program in a time when it should be shored up.

"Inevitably, enrollment will go down when the economy gets better," she said. "But it's a cruel irony that when times get bad, that's when cuts loom on the budget horizon."