Medicaid slashed as demand soars

Orlando Sentinel–January 9, 2009

Aaron Deslatte and Josh Hafenbrack

Tallahassee Bureau

TALLAHASSEE

Part of the Florida Legislature’s prescription for weathering the worst recession in three decades amounts to this: If you’re poor, don’t get sick.

Florida’s hospitals and nursing homes will absorb a $170 million-plus cut in Medicaid payments in the budget-balancing act state lawmakers will pass this week.

Bills before the House and Senate each slash between $170 million and $180 million from Medicaid as part of a $2.3 billion-plus package of spending cuts, borrowing and raids on reserve accounts. In all, health care for the poor and services for seniors, the disabled and foster kids face cuts of between $290 million and $390 million.

The cuts come at a time when Medicaid — which pays for health and nursing-home care for the poor and the disabled — is exploding, with 97,000 people added to the rolls as the state’s economy has deteriorated.

“The need goes up, and their budgets go down. And that’s the problem with approaching this crisis in a vacuum,” Tallahassee social-services advocate Karen Woodall said.

The health-care cuts set for floor votes today add up to 4 percent reductions in payments to hospitals and HMOs, 10 percent cuts to nursing homes and 5 percent cuts to county health clinics.

Rick Morrison, regional vice president at Orlando’s Florida Hospital, said his hospitals could weather the roughly $5 million in cuts.

“But we are more concerned that this is just an interim step,” he said. “I think this is just the start” of deeper cuts to come.

Even budget conservatives concede the cuts are deepening strains on the state’s health-care safety net.

“They’re going to have some problems, but hopefully they’ll hang on,” said Senate health-care budget chief Durell Peaden, R-Crestview.

But critics point out that the cuts are being made just a few weeks before details are released of a federal economic-stimulus plan that President-elect Barack Obama will send to Congress.

Although details remain murky, economists say the Medicaid component of the stimulus plan will be far larger than the one Congress passed after the Sept. 11 attacks, when Florida got more than $500 million in additional Medicaid dollars to bolster its recession-racked budget.

Social-service lobbyists and Democrats in Tallahassee speculate that Florida could get between $1 billion and $3 billion more Medicaid dollars over two years.

“Anything sounds good at this point,” state economist Amy Baker said.

But Republican lawmakers say it would be reckless to plan for federal money that hasn’t arrived.

“It would not be fully responsible to develop a plan . . . without their help,” said Senate Ways and Means Chairman J.D. Alexander, R-Lake Wales. “Should it come, then we would be willing to adjust.”

However, the bills to be voted on today wouldn’t allow any additional federal dollars to offset the cuts.

The federal government pays 55 percent of the cost of Florida’s Medicaid program, with the state paying 45 percent. The federal stimulus plan is expected to temporarily boost the federal share, allowing the state to cover its Medicaid-eligible citizens with less state money.

But the Senate’s budget bill requires the money from any boost in the federal payment rate to go back into general reserves. The House version requires that the money be used to pay back two funds lawmakers are raiding to balance the budget: the “rainy day” Budget Stabilization Fund, and the Lawton Chiles endowment, which pays for health care for children.

The Senate and House bills tap the funds for $900 million and $1 billion, respectively.

On Wednesday, Sen. Nan Rich, a Weston Democrat who sits on the Senate’s health-care budget committee, added an amendment to the Senate’s plan to use extra federal Medicaid money to offset cuts to in-home programs for seniors and pay for privatized foster-care services throughout the state.

But when the full Senate Ways and Means Committee took up the plan Thursday, the language had been changed to redirect any savings from the federal bailout back into general revenues.

Senate staff said the change was made at the direction of Alexander, using his power as chairman.

“The wording in the current bill does not allow us to” shore up other programs, Rich said Thursday. “It’s a work in progress, I guess you could say.”

In the House, Rep. Kevin Ambler, R-Lutz, said in Thursday’s floor debate that the influx of 97,000 people onto the Medicaid rolls had resulted in $144 million in unanticipated costs.

“It’s a tough year in health care,” Ambler said, adding legislators have a “very solemn job of making tough choices, and there are no easy choices in the health-care area.”