As the state Legislature prepares for an estimated $2 billion budget shortfall, Gov. Rick Scott has maintained that it is the state’s spending on Medicaid that is to blame. But some state policy experts say pinning blame for the state’s budget woes on the cost of Medicaid is “disingenuous.”
During a press conference today announcing his budget recommendations for the upcoming session, Scott said that if the state does not adjust Medicaid spending, “it will bankrupt the state.”
“No state program has this much growth and costs this much,” he said. “This is absolutely not sustainable.”
This has been a common theme as Scott discusses the state’s predicted budget shortfall. Scott had previously anticipated a $1 billion-plus surplus.
Bloomberg reported last week that Scott “said he has whittled down a corporate tax-relief plan compared with what he sought last year because of a ballooning deficit driven by health-care spending.”
According to the article:
“Medicaid is growing way faster than we thought,” the former hospital executive said yesterday. “Reducing taxes, as you would expect, when you walk in with budget deficits, is harder than when you don’t have budget deficits.”
Florida, which closed a $3.8 billion budget gap for fiscal 2012, is facing another of as much as $2.3 billion next year. in an interview in Orlando, Scott said he hadn’t anticipated a 2013 deficit, partly because he expected to get a federal waiver letting the state expand its use of managed care for recipients of Medicaid, the health-insurance program for the needy. The state hasn’t gotten the permission needed to make the changes.
Medicaid costs rose to about $20.3 billion projected for this fiscal year in Florida, from about $19.8 billion in 2011, with the state’s share surging 23 percent to $9.48 billion from $7.7 billion, legislative analysts said in an October report. The state’s share of the joint program partly funded by the federal government is forecast to rise 2.7 percent to $9.74 billion in 2013 and total costs may rise 15 percent by 2015.
“Revenues are growing because our economy is getting better, but Medicaid is growing faster,’’ said Scott, who started what became one of the nation’s largest hospital chains. He said he remains committed to cutting taxes and reducing regulation to increase the number of jobs in the state by 700,000, a central promise of his 2010 campaign.
Greg Mellowe of the Florida Center for Fiscal and Economic Policy tells The Florida Independent that “any implication that Medicaid spending is spiraling out of control is disingenuous.”
According to Mellowe, the projected increase in the state’s Medicaid spending amounts to a “2.6 percent bump for this year.” He says this “is the second smallest percentage increase in the past dozen years.”
“Even that increase can be attributed solely to increased enrollment resulting from job and coverage loss in the recession,” he says, “and enrollment growth is tapering as the economy begins to recover. In fact, Florida Medicaid spending has continuously grown at a slower rate than enrollment since the recession began.”
Mellowe also takes issue with claims that Medicaid costs have gone up because the state has not yet been able to expand its Medicaid privatization plans. The state is currently waiting for federal approval of its Medicaid overhaul.
Mellowe says the expansion plans “wouldn’t even begin to go into effect until next fiscal year.”
“And the significant managed care expansion from which the savings (5 percent) are to be derived wouldn’t be realized until at least the year after that,” he says.
According to Mellowe, the fact that the state’s share of Medicaid spending has increased has more to do with the “drying up of the federal Medicaid stimulus funding.” He says the Legislature used those federal funds, “even as they vehemently objected to accepting it,” to “supplant long-term state funding for the program.” He said that, as a result, legislators were “undermining Medicaid and leaving what appears to be a gaping hole.”
The state is expected to hear in the coming weeks from the federal government concerning its waiver request for Medicaid.