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Medicaid expansion costs start at $79 million and climb

By on August 27, 2012

Looking for the price-tag of the federal Affordable Care Act, analysts have released a report estimating that an expansion of the Medicaid program would cost the state $79.2 million during the 2016-17 fiscal year and that the costs would grow to $337.6 million by 2022-23, reports Jim Saunders of the News Service of Florida.

The report, however, is loaded with assumptions about issues such as how many people would sign up for Medicaid if eligibility expanded — and when they would sign up. The federal health law calls for broadening Medicaid eligibility, but the issue has become controversial in Florida because Gov. Rick Scott says the state will not go along with such an expansion.

Analysts, who released the report Thursday, also said they could not determine the Affordable Care Act’s spin-off costs for another large group of people: those who already meet eligibility requirements but have not enrolled in Medicaid.

It has been expected that already-eligible people would start signing up, at least in part because the federal law requires most Americans to have insurance coverage in 2014 or pay financial penalties. But low-income people are exempted from the penalties, making it difficult for analysts to pinpoint how many would enroll.

“The likelihood and pace of the population’s presentation for services cannot be reasonably forecast at this time,” the report says.

The analysts, representing the House, Senate, governor’s office and the Office of Economic & Demographic Research, met Aug. 14 to discuss the projections and then compiled the report. The Affordable Care Act, which Congress and President Obama approved in 2010, has been a lightning-rod political issue in Florida, with Republican vehemently opposing it.

In June, the U.S. Supreme Court upheld the constitutionality of most of the law. But the court said states can choose whether to comply with a provision that would expand Medicaid coverage by increasing a key income threshold used in determining eligibility.

Scott immediately said Florida would not go along with the expansion, with a large part of his argument based on the potential costs.

Under the law, the federal government would pay all of the costs of expanded eligibility during the first few years and eventually would pay 90 percent of the costs. If Florida rejects the expansion, it would forgo as much as $3 billion a year in federal funding, according to estimates.

The report shows that Florida would have to start picking up part of the Medicaid expansion tab in 2016-17, paying about $79.2 million out of an overall cost of nearly $3.2 billion. State costs would gradually increase during the next several years and are estimated at $337.6 million in 2022-23 out of a total cost of almost $3.4 billion.

The analysts, however, made important assumptions in coming up with those numbers. As an example, they assumed that 79.7 percent of the newly eligible people would enroll in Medicaid — a number based largely off current enrollment patterns — and also that those people would enter the program gradually, not all at once.

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