Enrollment in Medicaid continues to grow, but economists predict $1.25B surplus

Florida’s Medicaid program continues to grow as more residents are expected to turn to the safety net program for health coverage. But despite a projected rise in enrollment, state economists say the growth will not cause a major budget disruption for state legislators this year.

Florida economists released their revised projected enrollment and expenditures for the state fiscal year this week. And while enrollment in the program is expected to grow by 5.5%, the panel looking at the numbers agreed there will be a $1.25 billion general revenue surplus.

Both findings are driven by the federal government’s decision to extend the public health emergency through October, which means the state will continue to receive an additional 6.2% in federal matching Medicaid dollars through Dec. 31. It also means the state cannot disenroll anyone from the health care safety net program until the end of the year. Total costs for the program are expected to top $36.3 billion.

Assuming the elimination of the public health emergency, economists agreed enrollment in the health care safety net program would decrease by 7.1% in the fiscal year that starts in mid-2023 and runs through 2024.

Despite the lower enrollment, the state’s share of costs for the program will soar to more than $10 billion, which is $153 million more than the projected state costs for the current fiscal year. Total costs for the program are projected to amount to $36.5 billion.

Authorized by Title XIX of the Social Security Act, Medicaid was signed into law in 1965 alongside Medicare. All states, the District of Columbia, and the U.S. territories have Medicaid programs designed to provide health coverage for low-income people. The federal government establishes certain parameters states must follow, but states are given large discretion on how the program operates and who qualifies for coverage.

Florida created its Medicaid program in January 1970. The Legislature in 2011 passed the mandatory Medicaid managed care program, requiring most beneficiaries, from the cradle to the grave, to enroll in a Medicaid managed care program. The Agency for Health Care Administration (AHCA) launched the Medicaid managed long-term care program in 2013.

The Medicaid managed medical assistance program, which provides services to women and children, followed in 2014.

The expenditure forecast released Monday assumes a 6% reduction for Medicaid managed medical assistance plans and an 8.9% increase for the long-term care plans. The increase primarily is driven by the required increase in the minimum wages that must be paid to staff. The forecast also assumes a 5.2% reduction for costs paid in the Children’s Medical Services managed care program.

Florida finances its portion of the Medicaid program through a combination of state general revenue as well as “intergovernmental transfers” (IGTs) from local taxing authorities. The IGTs are used to help finance supplemental Medicaid payments for hospitals and other providers that treat a disproportionate share of low-income people and provide care to people that can’t pay their bills.

Economists assumed those IGTs would continue to flow from the local to the state level but noted in an executive summary that “the Social Services Estimating Conference strongly cautions that IGTs for these purposes may be at risk in the future, resulting in lower supplemental payments to providers.”

The Social Services Estimating Conference also released cost and enrollment projections for the Children’s Health Insurance Program (CHIP) which operates under the moniker, Florida KidCare. The program — which provides federal matching funds to states to provide health coverage to children who don’t qualify for traditional Medicaid because their parents earn too much money — was created in 1997.

The continuation of the public health emergency, and the mandate that people cannot be removed from the Medicaid program, has resulted in lower-than-anticipated enrollment in the program. Economists projected there will be 148,296 children in the KidCare program by June 30, 2023, which is 52,012 fewer children than previously projected. Costs are projected to total $385,413,035. The state general revenue cost is expected to amount to $93,822,773, which means there should be a $38 million general revenue surplus for the year.

Enrollment is projected to reach 238,404 by June 30, 2024, which marks the end of the 2023-2024 fiscal year. Program costs are expected to double, increasing to $661.2 million by June 30, 2024.