Two Tales of Medicaid Expansion: in Montana, a Step Forward; in Florida, a Step Back

As state legislatures move toward the end of their budget years, a few are still deciding whether to expand Medicaid to the working poor who lack insurance, as permitted under the Affordable Care Act (ACA).

The ACA as passed in 2010 called for all states to expand Medicaid to households earning between 100% and 138% of the federal poverty level. In 2012, however, the US Supreme Court ruled states could decide whether to expand the program, as it is jointly funded by state and federal sources. (The early years of expansion are 100% federally funded.)

As tracked by the Kaiser Family Foundation, 29 states and the District of Columbia have now expanded Medicaid, and at least 6 have actively considered it during the spring of 2015, including Florida and Montana.

On Thursday, the Montana House of Representatives passed an expansion bill 54-46, with 13 Republicans joining all 41 Democrats after 2 days of maneuvering for a vote. According to Montana Public Radio, an additional vote is needed before the bill returns to the Senate to reconcile a minor amendment. Democratic Governor Steve Bullock seems likely to sign the bill after his top health advisor testified in favor of it, the Missoulan reports.

Florida is another story. Over the winter, a high-profile committee of hospital and business leaders, under the umbrella Healthy Florida Works, urged lawmakers to pass Medicaid expansion to shore up hospital finances. Florida hospitals face the loss of more than $2.2 billion in federal funds, as the clock ticks on an agreement with CMS that pays hospitals caring for the uninsured and underinsured. The deal runs out June 30, 2015, and the federal government has already extended the program a year to give Florida time to work out a long-term arrangement.

Florida’s House speaker said no to expansion early in 2015, but talks were revived in the Senate. Republican Governor Rick Scott, who in 2013 said he could not “in good conscience” deny the uninsured access to care, this week reversed that position. But this time he says it’s over CMS’ refusal to extend the current hospital funding arrangement, known as the low-income pool (LIP).

“I like the program we have now,” Scott told reporters.

CMS, however, is unlikely to extend LIP in its current form. Doing so would run counter to its recent goals of promoting value-based care, something that would seem impossible if the fourth most-populous state was paid to steer people to the emergency room.

The agency is weaning states off arrangements that funnel low-income patients into costly acute care; instead, it wants to spend federal dollars on preventive care, for the good of patients and hospitals alike. That was the point of Medicaid expansion—to give the working poor access to primary care physicians who can treat chronic conditions, such as diabetes and heart disease, before they require acute care.

Reports are coming in that this approach works. The Cleveland Clinic recently announced a 40% drop in charity care from 2013 to 2014, which it attributed to Medicaid expansion.

CMS Chief Medical Officer Patrick Conway, MD, in a recent appearance at the University of Miami, said the agency was willing to work with Florida on expansion and was open to discussions about waivers, within certain limits. An estimated 1 million people fall into the coverage gap in Florida.

Around the Web

Rick Scott shifts again on Medicaid expansion

Montana House endorses Medicaid expansion

Florida takes another look at Medicaid expansion with CMS’ help

Cleveland Clinic reports 40% drop in charity care after Medicaid expansion