Turning Down Millions in Federal Money, Rick Scott Will Not Expand Medicaid July 3, 2012 Gov. Rick Scott said Florida won't create a mandated health insurance exchange program and will opt out of Medicaid expansion. (Photo by Gaston De Cardenas/Fundación España Florida.) By Ashley Lopez Florida Center for Investigative Reporting Following the Supreme Court’s decision to uphold the Affordable Care Act (ACA), Gov. Rick Scott said he still won’t implement the law in Florida. Specifically, he said Florida won’t create a mandated health insurance exchange program. He also said Florida would opt out of Medicaid expansion, which would be fully paid for by the federal government for the first few years. After a couple of years, the federal government would cover 90 percent of the costs. By law, if a state refuses to create its own health insurance program, the federal government will create one. However, the Medicaid expansion situation is more complicated. Even though the Supreme Court upheld ACA, the justices ruled that the Medicaid expansion provision was “coercive” and allowed the states to opt out of the expansion without penalty. Previously, the federal government had the power to take away a state’s existing Medicaid funds if they did not expand the Medicaid program to include more people. The New Republic’s Jonathon Cohn explained: But what happens if states choose not to expand Medicaid to meet the new guidelines? That’s where the conservative majority, joined by liberals Stephen Breyer and Elana Kagan, surprised a lot of people. As the law was originally written, the entire Medicaid package became an all-or-nothing deal: States that didn’t want to meet the new, more expansive guidelines were free to do so. But choosing that option meant forgoing all federal Medicaid money. The Court on Thursday ruled that choice was “coercive.” Roberts, echoing the arguments of the law’s challengers, likened it to holding a gun to the states’ heads. The remedy was not as extreme as it might have been: The justices didn’t strike down the Medicaid expansion altogether. But they insisted that states choosing not to expand coverage give up only the money that would have gone to covering the new populations. Those states would remain eligible for the funds that they already get, to cover people who already qualify for Medicaid under the old guidelines. The practical effect is to change the trade-offs states face when deciding whether to expand Medicaid, as the Affordable Care Act seeks to do. That raises the possibility that multiple states will turn down the deal, leaving millions of their poorest residents without insurance. If you look at the state officials who challenged the law in court, they come from states representing about half the uninsured people who are supposed to get Medicaid coverage. That’s no small thing. It takes no intellectual creativity to imagine a Rick Perry or a Rick Scott rejecting the new Medicaid money from Washington—and making a very big show of it. Given the opportunity to ignore the law, Scott said he is taking it. The Associated Press reported this weekend: Florida Gov. Rick Scott now says Florida will do nothing to comply with President Barack Obama’s health care overhaul and will not expand its Medicaid program. The announcement is a marked changed after the governor recently said he would follow the law if it were upheld by the U.S. Supreme Court. “Florida is not going to implement Obamacare. We are not going to expand Medicaid and we’re not going to implement exchanges,” Scott’s spokesman Lane Wright told The Associated Press on Saturday. Wright stressed that the governor would work to make sure the law is repealed. Scott told Fox News the Medicaid expansion would cost Florida taxpayers $1.9 billion a year, but it’s unclear how he arrived at that figure. Scott said the state will not expand the Medicaid program in order to lower the number of uninsured residents, nor will Florida set up a state-run health exchange, a marketplace where people who need insurance policies could shop for them. “We care about having a health care safety net for the vulnerable Floridians, but this is an expansion that just doesn’t make any sense,” he told Fox host Greta Van Susteren on Friday. Scott has gone back and forth on the issue after the U.S. Supreme Court ruled Thursday that Congress cannot withhold federal Medicaid funding from states that opt out of a requirement in the overhaul to expand coverage to those just above the poverty line. The Medicaid expansion would have been a particularly big help in a state like Florida, which has a very high rate of uninsured people. ProPublica crunched the numbers and found that in Florida, 951,622 people could gain insurance in the state under the expansion. That’s the third largest jump in enrollees nationwide, after California and Texas. Not only would Florida yet again pass up on millions of dollars from the federal government, but hundreds of thousands of Floridians would be caught in a gray area of the law that would leave them uninsured. According to Health News Florida: If Florida says no to Medicaid expansion, as the Supreme Court has said it can, it will forgo billions in federal aid over the next 10 years to save a fraction of that amount. Also, it would mean leaving more than 1 million of the state’s poorest citizens uninsured, while middle-class and modest-income workers would be able to buy health insurance through exchanges — in many cases with federal subsidies. As the Washington Post reported today, a state that decides not to expand its Medicaid program will leave a “donut hole” in coverage that affects the very poorest citizens. “There is a real debate here where states are going to have to weigh leaving huge amounts of federal dollars on the table versus accepting potential exposure in the future,” said Matt Salo, executive director of the National Association of State Medicaid Directors, according to the Post. “Before, you just had to just hold your nose and do it.” Authors of the Affordable Care Act assigned those with incomes of less than 133 percent of the federal poverty level — about $30,000 for a family of four — to the Medicaid expansion. Those who earned between that and 400 percent would be eligible for a sliding scale of subsidies to buy health insurance on the exchange. Regardless of whether Florida expands its Medicaid program, Floridians would be paying taxes to the federal government, effectively helping to pay for everyone else’s expanded coverage nationwide. PolitiFact reports that Scott is also using some erroneous information to support his decision to have Florida opt out of the Medicaid expansion.