Florida's best Medicaid option may be to get out of the program altogether.
Adding to the current budget-busting indigent-care costs, expanded eligibility rules from Washington will pile an impossible fiscal burden on the state, analysts say.
"Florida would be smart to consider" opting out, said Edmund Haislmaier, senior research fellow at the conservative Heritage Foundation. He estimates that 40 states would come out ahead financially by exiting the low-income health-care program.
The driver for dumping Medicaid is the new federal health-care law, which is scheduled to broaden the pool of eligible users in 2014.
Starting that year, Medicaid will expand to include anyone with incomes up to 133 percent of the federal poverty level, which is $29,327 for a family of four in 2010.
Haislmaier says that in states which drop Medicaid, the program's low-income clients would instead receive federal subsidies to buy private insurance through state exchanges, also due to take effect in 2014.
States opting out of Medicaid would become wholly responsible for remaining Medicaid patients who require nursing homes and other long-term care, for premiums and other Medicaid costs for Medicare beneficiaries.
But Haislmaier says that would still be a net gain for Florida because everyone else would go into the insurance exchanges.
"Florida would save up to $3.8 billion in 2014 and save $28 billion over the first five years," he projects, contingent on how the plans are designed.
While Haislmaier cautions that his calculations are average estimates, states across the country are seriously exploring the opt-out option.
Texas, which shoulders a $45 billion biennial Medicaid bill, is considering pulling out. As in Florida, the prospect of raising taxes or boosting insurance premiums to prop up the existing program is a nonstarter in a state with a conservative Republican governor and a GOP-dominated Legislature.
The largest state with the biggest Medicaid bill of all, California, "could solve its budget problem" by opting out of Medicaid, Haislmaier says.
Quitting Medicaid and letting the exchanges pick up the slack is generally "most likely to work for larger states," he says.
"The states are in a similar situation to employers" looking to shed employee health-care costs, Haislmaier told Sunshine State News. "Look for the presence of a new generous federal subsidy through exchanges as an alternative."
On the other hand, he warned, "If subsidies are scaled back, then the calculation would change significantly."
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Contact Kenric Ward at kward@sunshinestatenews.com or at (772) 801-5341.
