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  • Hospital group endorses McKay's tax reform

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    Hospital group endorses McKay's tax reform

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    By MARTIN DYCKMAN, Times Associate Editor

    © St. Petersburg Times
    published January 20, 2002


    A 45-year-old woman with cancer and diabetes. Her husband works, but they have no health insurance. A woman, 42, whose husband left home after she was diagnosed with breast cancer requiring multiple surgeries. An 18-year-old student partially paralyzed in a motor accident.

    They are among some 25,000 very ill Floridians who have no health insurance and who are too young for Medicare but not quite poor enough for Medicaid whose medical bills are paid by Florida's Medically Needy program. But on June 30, the payments are scheduled to stop. The Legislature voted last month to sacrifice that program, among others, to the budget deficit brought on by the recession and aggravated by the Sept. 11 attacks. Gov. Jeb Bush's proposed budget would restore the medically needy program for at least a year, but under conditions that many clients might not be able to afford.

    Scrapping the Medically Needy program would save the state $110-million, according to Tony Carvalho, a lobbyist for the Florida Hospital Association, which provided the patient profiles described in this article. But it would also cost the state $173-million in federal matching funds that it would have received for continuing the program.

    All told, Florida would pass up $232.9-million in Medicaid matching funds next year as the price of shaving state Medicaid spending by $214.8-million. It is the falsest of false economies.

    Though Medically Needy clients, who took the brunt of the cuts, would lose their access to prescription drugs and primary care physicians, Carvalho's hospitals would still treat them, adding to a burden of uncompensated care that was last reported at $1.2-billion statewide. But that would be even more expensive care, in that emergency rooms would be substituting for doctors' offices, and sometimes it will be too late.

    When tourists stay home, it is no stretch of the imagination to say that Floridians die.

    "Who do you think will pay the cost?," Carvalho asked at a recent hearing of the Senate Finance and Taxation Committee. "The local community or the businesses in the state."

    Hospitals would have to recover their costs somewhere, so the Legislature's budget-cutting expedient would ripple through the economy, emerging in the form of lower profits for Florida businesses and higher health insurance premiums for the employers and their workers.

    That, Carvalho said, is why the Hospital Association has endorsed Senate President John McKay's tax reform plan. At the hearing, he was the only witness to speak in favor of it. His board, he said, would have endorsed the plan even without a component that calls for eliminating the so-called "bed tax" that hospitals must collect to help the state winnow more funds from Medicaid.

    Even a more stable revenue base is no ironclad defense against a recession, he conceded. But if the deficits weren't as steep, perhaps the Legislature would feel more confident about using the Budget Stabilization Fund to tide programs over. Even as the governor and Legislature agreed to ax the Medically Needy program, along with dental, vision and hearing care for adult Medicaid patients, they left some $900-million untouched in the emergency fund.

    "If we settle the fluctations, maybe we would be able to use that as a bailout in bad times," said Carvalho, a former legislative budget staffer.

    Carvalho welcomed Bush's budget proposal but voiced reservations. Clients would be required to pay so much of their own medical expenses up front -- equal to two-thirds of their income in some cases -- that many might have to drop out. They would still turn up at hospitals to receive free treatment, but they would be that much sicker for having given up the prescription drugs and physician visits that the program pays for.

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