10 False Claims about the Proposed Alternatives to Medicaid Expansion

Claim #1: “The House plan gives people a real choice of private health insurance like legislators have.”

Reality:          The House plan would provide $167 a month (with an additional $25 contributed by the enrollee), which is simply not enough to buy coverage that provides adequate benefits and affordable deductibles, co-pays, etc. The only way these very low-income enrollees will get meaningful coverage that they could actually use is by paying an additional premium of likely hundreds of dollars per month that they clearly do not have. Even if there was agreement that the legislature should set up a two-tiered system in which poor people get coverage with minimal benefits or impossibly high deductibles, these types of pretend coverage can no longer be sold starting in 2014. Therefore, unless enrollees are able to pay hundreds more each month in premiums, their “coverage” options would consist of products like medical discount cards and prepaid clinic visits.

As a result, the characterization of the choice between the Senate and House plans as a choice between Medicaid and quality private insurance is grossly inaccurate. Rather, it would be a choice between a strong Medicaid  alternative) and something that isn’t even coverage.

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Claim #2:       “The House plan is more fiscally responsible than the Senate plan.”

Reality:          The House plan would cost the state nearly $2½ billion in state funding over 10 years, but would serve one-eighth the number who would be covered under the Senate plan, and even those who are covered would not have real coverage (see Claim #1). Official state forecasts say that the Senate plan would cost $3½ billion, but this number has been inflated by several inaccurate assumptions. Even assuming the forecast is accurate, the difference of $100 million per year is a small fraction of one percent of state general revenue.

That’s not nearly the whole story, however.  Official forecasts show that the state would save more in state spending that it would spend ($385 million in the Medically Needy program alone, annualized.)

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Claim #3:       “The House plan targets the most vulnerable.”

Reality:          Even at full implementation, the House plan would make only about 115,700 slots available to parents below the poverty line who do not qualify for Medicaid now ($303 to $1632 per month in a family of three) and disabled persons above the SSI line. The House plan wouldn’t even fully serve these two groups. However, most wouldn’t remain eligible anyway, because they would be required to pay at least $25 a month (and likely much more) as well as meet mandatory work requirements.

Among the uninsured Floridians in poverty who could never be covered by the House plan:

  • Adults ages 50 through 64 who do not have (or who no longer have) minor children – no one in this age bracket can hope to afford meaningful private insurance on a poverty-level income
  • Low-wage workers without children, who are the backbone of Florida’s service-driven economy
  • Young adults under age 26 who are not fortunate enough to be able to have access to a parent’s coverage

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Claim #4:       “Florida would draw down more federal dollars by requiring adults just above the poverty line to seek coverage through the Exchange as the House proposes, rather than cover them through the Senate plan.”

Reality:          This claim is extremely misleading and is the result of selectively focusing on part of the picture while completely ignoring the rest. That said, it is likely true that requiring those just above the poverty line to use the Exchange will bring in more federal dollars, at least on a per person basis. However, that is only because private insurance costs more than Medicaid. Despite its bad rap, Medicaid has very low administrative overhead and a stronger track record with respect to containing costs than private insurance.

What the claim entirely ignores is the fact that Florida would not draw down any federal funding at all for people at or below the poverty level under the House plan, and this group represents almost 2/3 of those who would be newly eligible. Looking at the full picture, under realistic assumptions, the Senate plan would bring in approximately $35 billion more in federal funding to Florida over 10 years than the House plan.

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Claim #6:       “State spending on Medicaid is already unsustainable, and expanding Medicaid will only make it worse.” (An even more extreme claim was that “the legislature could not give state employees raises during the past several years because of Medicaid spending.”)

Reality:          Opponents of Medicaid have been misrepresenting the growth in Medicaid spending for years.  The growth in Medicaid spending in recent years is due solely to the growth in Medicaid enrollment due to the recession. In fact, Medicaid spending per person is less today than it was in 2004-05.

The claim that the increase in Medicaid prevented state employees from getting raises is particularly disingenuous. From 2008 through 2011, federal Medicaid stimulus funding increased the federal match rate in Florida from 55% to 68%, freeing up billions in state money that had been used in Medicaid for unrelated purposes.

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Claim #7:       “Florida cannot afford the Senate plan because it includes childless adults. Other states that expanded Medicaid to include childless adults saw their costs spiral out of control.”

Reality:          The “lessons” that such other states like Arizona and Maine supposedly learned are based solely on misrepresented, selective, and incomplete information provided by critics. Among the problems with those “analyses” were the expectation that increasing coverage for a small group would reduce uninsurance overall and the deliberate presentation of cost and enrollment data in a vacuum, completely ignoring consideration of events much larger than expansion, particularly overall population growth and the recession.

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Claim #8:       “Washington is rigidly tying Florida’s hands with inflexibility on Medicaid expansion.

Reality:          Federal officials have provided Florida with numerous documents explaining the many ways in which states have flexibility in running their Medicaid programs. What those making the claim likely mean is that they want the federal government to foot the bill for a punitive program that doesn’t provide real coverage.

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Claim #9:       “The federal government can’t be trusted to hold up its part of the bargain. In fact, Florida’s federal Medicaid match rate has continuously changed over the years.”

Reality:          The federal government has never defaulted on its obligations to states. Furthermore, the federal match rate for the newly eligible is not subject to even the limited fluctuation that occurs in the current Medicaid program. Under the Affordable Care Act, the match rate will be 100% from 2014-16 and 90% in 2020 and beyond.  The match rate for the current Medicaid program does change gradually over time based on a federal formula. (Florida’s rate is increasing by almost 4% over a 5-year period.)

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Claim #10:     “Medicaid is a broken system, and we cannot justify putting more people in it.”

Reality:          This claim may be one of the most disingenuous of all. Every other year, legislators have touted high satisfaction rates among Medicaid recipients. What the studies cited actually say is that some health outcomes may be lower for patients in Medicaid vs. Medicare or high-quality commercial insurance. However, opponents make the leap to asserting that Medicaid is worse than having minimal or no coverage at all. Medicaid in fact provides strong coverage at much lower cost, though Florida’s low provider reimbursement rates have hurt provider access.