Florida’s lawsuit against federal health care reform challenges two aspects of the law: the expansion of Medicaid and the requirement for individuals to buy health insurance. The latter has probably gotten more attention, but on Thursday, lawyers working on the case explained the second aspect to a panel of lawmakers mulling efforts to reform the state’s Medicaid program.

In a Wall Street Journal editorial last week, Attorney General Pam Bondi argued that by continuing the challenge to federal health care reform begun by her predecessor, Bill McCollum, she was carrying out her duty to defend the Constitution:

Unwilling to acquiesce to such a blatantly unconstitutional act, Florida and 19 other states challenged the new law and its requirement that nearly every American purchase health insurance. The lawsuit is based on the common-sense notion that an individual’s decision not to purchase health insurance is not an act of “commerce” that can be regulated under Congress’s constitutionally enumerated powers.

On Thursday, lawyers from the state Attorney General’s office explained to members of the state House Health and Human Services Committee that what sets Florida’s suit apart from the case being mounted by Virginia is its challenge to the expansion of Medicaid. Under the health care reform law, states will have to expand access to people with incomes below 133 percent of the federal poverty level.

“We’re the only show going that is challenging the Medicaid expansion,” Special Counsel Blaine Winship said of the lawsuit, though it’s the challenge of the individual mandate that’s most impressed U.S. District Judge Roger Vinson:

Lawyers for the states and the administration sparred over whether this would impose a crushing burden on state budgets. But as a legal matter, Vinson primarily focused on the states’ argument that though Medicaid is a voluntary program the downside of pulling out is so large that the states can’t afford to do so. Therefore expanding the program’s costs to them amounts to a violation of state sovereignty.

Noting that officials in Texas have considered pulling out of Medicaid, Vinson pressed Blaine H. Winship, an assistant Florida attorney general representing the states on whether they really are bound to participate.

“Isn’t it still voluntary?” the judge asked several times.

A study released last year by the Urban Institute and the Kaiser Commission on Medicaid and the Uninsured finds that under health care reform, Florida is projected to spend an additional $1.2 billion to $2.5 billion on Medicaid between 2014 and 2019 (the first years the health law takes effect) because of the health care law, depending on the level of participation in the program. The federal government will contribute between $20 billion and $24 billion. In either case, Florida will pay less than 10 percent of the total.

Winship, of the attorney general’s office, told committee members that the relationship between states and the federal government  becomes “coercive” under the health care law. The state can’t withdraw from the program without giving up tens of billions of dollars in federal funding, and even if the federal government is paying for most of the Medicaid expansion, it will still increase the burden on Florida’s already-strained budget. What’s more, he added, increasing the number of Medicaid patients could create a shortage of doctors, nurses and hospital beds.

A report (available below) issued Thursday by the Florida Center for Fiscal and Economic Policy contends that “the potential benefit to Florida’s economy is staggering.”

Karen Woodall, who lobbies for the group, said in an interview that no area of Florida’s budget draws more federal money than Medicaid. That money gets pumped into the health care sector.

Still, complying with the health care law will be relatively expensive for a state already looking to trim Medicaid costs. One reason the law could cost more here than in other states is that Florida offers less Medicaid coverage, and has more uninsured people, than other states, Woodall said. For example, Florida’s Medicaid program rarely covers adults who don’t have children. Some states, such as Massachusetts, will actually save money under health reform.

The Florida Center for Fiscal and Economic Policy report:

FCFEP Medicaid Study

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