Florida’s Medicaid program, public health insurance for certain low-income individuals, is jointly funded by the state and federal governments. Regardless of the program’s annual costs, federal dollars cover over 60% of the bill. Thanks to this reliable support, the State can meet the needs of all those who are eligible. But this could change.
The federal government is currently encouraging states to elect to “block grant” their Medicaid program, and on January 30, 2020, released new guidance for states to facilitate this process. In contrast to the current guarantee of a “federal match,” a block grant would cap the federal contribution to Florida’s Medicaid program at a fixed amount. Beyond that cap, the state would bear all responsibility for program costs. The Administration’s move represents a major cut to federal Medicaid spending, with planned savings of $1.5 trillion from the national Medicaid budget over ten years. To lure states into accepting a potentially massive loss in necessary funding, the Administration is promising increased flexibility in the Medicaid program. But this is a misleading “inducement”, as states already have significant program flexibility. What Florida needs is not more flexibility but a reliable funding partner in the face of growing demands for health coverage. For more information, see our February 2020 brief: Medicaid Block Grant: Not a Rational Way Forward for Florida on Coverage Expansion.
Status and Impact
Florida’s Medicaid program currently guarantees coverage for children in low-income families and very low-income parents of minor children, pregnant women, and individuals who are blind, aged, or disabled. Over 4 million Floridians rely on Medicaid for their health care. If Florida opts-in to capped Medicaid funds, a budget shortfall will be inevitable. While the federal government will save money, the state’s costs will balloon. Medicaid in Florida already has one of the country’s lowest per enrollee spending rates. When the state decides it is unwilling or unable to take on additional costs, it will be forced to take ruthless measures: cut eligibility, reduce benefits, and/or establish waiting lists.
Florida’s residents already have serious economic challenges and health care needs that underscore the potential negative impact of a Medicaid block grant. For example, Florida is home to over 800,000 children living in families below the federal poverty level, has the second largest waiting list in the country for severely disabled residents requiring home and community based services in order to avoid institutionalization, and is tied for first among the states for the highest portion of senior residents. The state has one of the nation’s highest rates of HIV infection and a high rate of drug overdose mortality, and will be among the first in the nation to experience the wide-scale health impacts of climate change.
Capping federal health coverage funds will mean that many of these people, and likely those with the most expensive care needs, will find themselves without coverage for the care they require. A Medicaid shortfall would also threaten the state’s ability to cover high-cost prescription drugs, to address a public health emergency like the opioid epidemic or Zika, or to meet the needs of Floridians in an economic downturn. In short, a Medicaid block grant would spell disaster for the health of state residents and the viability of the providers who serve them.