Christine Jordan Sexton
Hours before the House passed a bill expanding children’s access to Florida KidCare, Agency for Health Care Administration Secretary Jason Weida used the children’s health insurance program as a cautionary tale of broken financing promises.
During a Senate confirmation hearing, Weida cited KidCare as an example when asked about the merits of expanding Medicaid to about 1 million uninsured childless adults. The federal Patient Protection and Affordable Care Act (ACA), often called Obamacare, would allow such an expansion.
In that scenario, the federal government covers 90% of the expansion costs, which is significantly more generous than what it contributes to cover the costs of the traditional Medicaid program. To entice states such as Florida that haven’t expanded Medicaid, the American Rescue Plan Act enhances the traditional federal Medicaid match — referred to as FMAP — to 95% of those costs.
“That obviously looks fairly attractive on the surface at least. But a couple of concerns I have about that are that those things are not guaranteed to last,” Weida said, adding that the 5-percentage-point enhancement was valid for five years, and he didn’t expect it to last beyond that.
And while there’s no “express horizon” for eliminating the 90% financing commitment under the Obamacare expansion, Weida argued it’s possible. “We have seen past examples where, in the beginning of an expansion program, the numbers are quite high, and then they have gone down over time.”
Weida told Senators that, as part of the ACA, the federal government had committed to paying more than 90% of the Florida KidCare. But he said today, the federal government was paying around 73%.
However, Weida’s cautionary tale of financial woe doesn’t quite add up.
“What I can definitely say is all of the (Federal Medicaid Assistance Percentage) changes to KidCare have either been to benefit the state or have been a planned reduction from the moment they were enacted,” Amy Baker, the economist who heads the Office of Economic and Demographic Research, told Florida Politics.
Florida KidCare is the state’s version of the federal children’s health insurance program (CHIP). It is a Medicaid expansion program for children living in families who earn too much to qualify for the traditional Medicaid program. Congress passed the law in 1997 and agreed to pay an enhanced Medicaid rate to states that would expand Medicaid to children.
The Florida Legislature passed the optional Medicaid expansion in 1998 with the promise the federal government would pay a share roughly 13 percentage points higher than the traditional Medicaid match at the time. It amounted to the federal government covering 69 cents from every dollar spent on providing uninsured children access to a subsidized health care plan.
The federal match remained about the same, give or take a few points, until more than a decade later, after Congress passed Obamacare.
In addition to expanding Medicaid to childless adults, the federal law included a four-year, 23-percentage-point bump to the already enhanced CHIP match. At that point, the federal government paid about 95 cents of every dollar Florida spent providing uninsured children access to health insurance.
When the 23-point enhancement was slated to expire, Congress extended it for another two years, authorized a glide path that ratcheted it back down, and eliminated it effective Oct. 1, 2020, returning the KidCare match to a national average of 71%.
The 6.2-percentage-point federal Medicaid enhancement Florida tapped into during the public health emergency did not apply to KidCare, only to the traditional Medicaid program. But it indirectly impacted the rates because the enhanced KidCare match is calculated based on the conventional Medicaid FMAP.
In addition to maintaining and enhancing the KidCare FMAP, Congress has continued to extend the shelf life of the CHIP program. It was initially authorized for 10 years as part of the Balanced Budget Act of 1997 but has been reauthorized seven times since then.
“What I can say strongly is that the only (funding) surprises have been good,” Baker said.
Florida KidCare isn’t the only optional enhanced Medicaid funding the state has agreed to accept. And to date, none of them have fallen through.
The 6.2-point bump to the Medicaid FMAP in 2020 was optional. Still, it came with requirements, such as a prohibition from removing anyone from the program during the national public health emergency.
Florida has been getting the enhanced FMAP since January 2020. Gov. Ron DeSantis’ administration announced the state would stop accepting the enhancement beginning in April, which allows the state to begin disenrolling people from its Medicaid rolls.
And although Weida said he doesn’t expect the Medicaid enhancements in the American Rescue Plan Act to last beyond another two years, Florida agreed to take advantage of the federal government’s commitment to helping pay the costs of extending Medicaid coverage to postpartum women by 10 months.
That means they will have access to Medicaid benefits for one year following childbirth instead of two months, a policy change Weida praised during his confirmation hearing.
Florida has also tapped into a 10-percentage-point hike in Medicaid funding for enhancing access to home- and community-based services.
Despite the success of KidCare and Florida’s choice to accept other FMAP enhancements, Weida said he worried that expanding Obamacare could leave the state on the hook for hundreds of millions of dollars or more.
Expanding Medicaid to about 1 million Floridians would cost roughly $5 billion. Florida would be on the hook for 10%, or $500 million.
“If that 90/10 number were to change at some point in the future, that $500 million could reach a billion or more. I don’t know whether that’s going to happen or not; I’m just saying these are the concerns that I would want people to be aware of before this body were to pass any kind of bill like that,” Weida told the committee.
“But I can promise dialogue. I can promise a good-faith attempt to talk with anybody who proposes such a bill. But in all candor, I just wanted you to know some of my concerns.”
The Obamacare expansion is optional. So, in the unlikely event the 90% match was eliminated, Florida would not have to continue offering childless adults Medicaid coverage.
“It’s not an entitlement,” Baker said.
In addition to worrying about the potential financial commitment of Medicaid expansion, Weida cited two studies that highlighted the adverse impacts that the expansion has on the underlying traditional Medicaid population.
He pointed to a 2019 Journal of Health Economics study that found that Medicaid expansion and the federal health insurance exchange resulted in 24% slower ambulance response times. The study said Obamacare caused it by extending “coverage to individuals who, in its absence, would not have availed themselves of emergency medical services.”
Weida also cited a second study, conducted in 2017, analyzing the impact of extending Medicaid coverage to childless adults in the first two years after the law was passed. That study found the law increased access to health care coverage, but Medicaid patients in expansion states had longer appointment wait times.
Again, Weida told Senators he wasn’t predicting that would occur in Florida but said there are “some things that I would just think about if someone were to present a bill and they wanted my opinion.
