Why Florida Business Wants Medicaid Expansion

June 4 (Bloomberg) -- Florida’s business community, a bastion of conservatism on most matters, was among those pushing hardest for a state measure that would have adopted a major part of President Barack Obama’s federal health-care law.

What made the situation unusual was that business wasn’t getting its way in a state where it almost always does.

State lawmakers adjourned last month without agreeing on a proposal that would extend Medicaid coverage to low-income residents without adequate health care, even with the backing of Associated Industries of Florida and the Florida Chamber of Commerce as well from Republican Governor Rick Scott. The business leaders will have to wait until next year to try again.

Under the health-care law, the state would get about $51 billion in federal money in the next 10 years to expand Medicaid by raising income eligibility limits to 138 percent of the 2013 poverty level, or those making as much as $32,499 for a family of four. If the state eventually agrees to a Medicaid expansion, the federal government would cover all costs for the first four years. Funding would drop in the following years before leveling off at about 90 percent by 2020.

Businesses have a big stake in the outcome. The health-care law requires companies with more than 50 full-time employees to provide health insurance to anyone working more than 30 hours a week.

Two Industries

An expanded Medicaid program would extend those benefits to workers in the state’s vast tourism, hospitality and agricultural industries. The importance of the two sectors can’t be overstated: They employ large numbers of low-paid workers and account for as much as a quarter of the state’s $750 billion in annual economic output.

Without the Medicaid expansion, many of those workers must get insurance either from their employers or from a federal health-care exchange. If an exchange is used, employers must pay fines ranging from $72 million to $108 million, or about $3,000 per worker, according to a Florida Chamber of Commerce estimate. It’s easy to see why Florida businesses would like the U.S government’s help.

The hypocrisy is as thick as the state’s humidity. Florida balances its budget with billions in federal money, taking dollars to build roads; provide health care for elderly nursing-home residents; offer school lunches for poor children; and finance research for universities. A quarter of this year’s $74 billion state budget comes from federal sources.

Direct aid to the state doesn’t include the billions of dollars in retirement and disability payments made to Floridians, defense contractors, salaries paid to federal employees and the military. Add grants to cities and counties and you can see Florida has long been awash in federal money. The state ranks No. 4 among recipients of funding from Washington.

All of this has made the state Legislature, which is controlled by Republicans, look a little strange for turning down a federal offer that would have extended health care to more than 1 million Floridians, especially after Governor Scott’s about-face on the issue in February made national news. Yet Scott, who won election in 2010 on an anti-health-care-law platform, never pushed hard for the plan during the Legislature’s 60-day session that ended May 3.

House Speaker Will Weatherford led the opposition to the law, saying he didn’t like taking federal money that has to be borrowed and didn’t believe the government will provide the funds after the first few years.

But it shouldn’t even be up for debate that Florida needs a decent health-care system that provides for those who now often seek medical treatment at a much higher cost in hospital emergency rooms. Emergency-room use is popular with the uninsured because federal law requires hospitals to offer care to all sick people who come in.

Emergency Rooms

The Centers for Medicare and Medicaid Services estimate that about half of all emergency-room services go unpaid, leaving the burden on hospitals, doctors, private insurers and the state.

Of course, emergency-room care is inefficient and expensive. A 2010 survey by the Medica Choice Network, which operates more than 4,000 Midwest clinics and hospitals, found that emergency-room costs for minor ailments ranged from $345 to $665, compared with $97 to $127 at urgent-care centers.

Scott, a former health industry executive, surely knows these numbers. Yet he said it was the last year’s U.S Supreme Court ruling upholding Obama’s health-care legislation, rather than fiscal realities, that made him support the Medicaid expansion. “It doesn’t matter what I believe,” Scott said. “The Supreme Court already made their decision. We had an election in the fall, and the public made their decision.’’

Yet the Supreme Court left the door open for states such as Florida, and as many as two dozen others, to reject Medicaid expansion.

Scott bears much of the original blame for creating an environment in which it seemed reasonable to refuse federal money. Shortly after taking office in 2011, he rejected $2.4 billion in federal funds to pay for a new high-speed rail line to be built between Tampa and Orlando. His decision on that issue was cited as a precedent for the Legislature’s stand on health care.

Now, as he watches other Republican governors -- Jan Brewer of Arizona, John Kasich of Ohio and Rick Snyder of Michigan -- fight to persuade their legislatures to allow the Medicaid expansion, all he and Florida’s businesses can do is hope they can figure out how to get their legislators to go along in 2014.

(Lucy Morgan is the former capital bureau chief for the Tampa Bay Times and winner of the 1985 Pulitzer Prize for investigative reporting. The opinions expressed are her own.)

To contact the writer of this article: Lucy Morgan at

To contact the editor responsible for this article: James Greiff at

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