Florida gauges cost of Obamacare for taxpayers

6:23 PM, Jan 22, 2013   |    comments
The Senate Select Committee on Patient Protection and Affordable Care Act hears two very divergent predictions on the impact of Obamacare in Florida.
  • Share
  • Print
  • - A A A +
Dave Heller Video Stories
More David Heller Stories

Tallahassee, Florida -- State lawmakers are trying to get an idea of how the federal health care law will impact Florida and whether they should expand Medicaid to cover more than a million uninsured Floridians.

They heard two very different predictions on Tuesday.

One came from Michael Cannon of the Cato Institute. He told a Senate committee that the health care law will depress economic activity, eliminate jobs, increase health care costs and reduce access to care.

Cannon offered a dire view, estimating the Affordable Care Act would reduce the nation's economic output by as much as $750 billion and eliminate 800,000 jobs.

The other perspective on Tuesday came from Jonathon Gruber of the Massachusetts Institute of Technology. Gruber helped write the Affordable Care Act and he designed Massachusetts' health care plan, which is the model for the federal plan.

Gruber said the plan has been a great success in Massachusetts and he predicted the same for the national version.

He said the act will dramatically increase coverage for people without health insurance and have little effect on most people's premiums.

For businesses, Gruber said they will no longer see huge health insurance rate hikes and get more certainty on health care costs from year to year.

"If you ask small businesses what bothers them about health insurance, sure, they wish it was cheaper. But what really drives them crazy is the year-to-year uncertainty and that will be reduced and that is a huge accomplishment here."

Gruber reported 50 percent of Floridians get their health insurance coverage from large employers. For them, he said the ACA will have little effect.

Another 22 percent of Floridians get insurance from small businesses. He said they might see an increase of several percent in premiums but it would be offset by tax credits for the smallest and lowest wage employers.

About six percent of Floridians get insurance from the individual market. Gruber said they will see higher premiums because the ACA mandates richer benefits for most people in this group and it prohibits insurers from rejecting coverage for sick people.

However, Gruber contends those premium increases will be offset by "enormous tax credits" from the ACA.

"Florida will no longer be a state where you're worried that because you get sick, you go bankrupt. That won't happen anymore because individuals will have the certainty of knowing that no matter how sick they are, no matter what pre-existing conditions they have, they'll now be able to get health insurance."

Gruber said one group would see higher premiums and they might be substantial - young people with higher incomes who buy individual insurance. He urged lawmakers to think about how they might prepare those insurance customers for higher insurance costs.

Cannon and Gruber also disagreed on whether Florida should expand its Medicaid program to cover more Floridians. Cannon said the cost to taxpayers would be substantial.

"The Medicaid expansion will cost the state of Florida roughly $20 billion over its first 10 years. That is the state's portion of the spending under this expansion and that's for 2014 through 2023. $20 billion."

Gruber responded saying the federal government will pay 90 percent or more of the cost of Medicaid expansion so lawmakers should not penalize uninsured Floridians to fight the federal deficit.

The act's cost estimates have varied widely to date. Gov. Rick Scott said earlier this month the plan would cost Florida $26 billion over 10 years, but later revised his number to $3 billion.

Florida's Medicaid program currently covers about three million poor, elderly and disabled Floridians at a cost of more than $20 billion a year.

The ACA aims to cover more people by expanding Medicaid coverage to people who earn up to 133 percent of the poverty level, which amounts to about $29,000 for a family of four in Florida.

Dave Heller

Most Watched Videos