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Report: Health plan may go broke

Even if a delayed tax increase were in effect, Hillsborough's indigent health plan could face losses.

By BILL VARIAN

© St. Petersburg Times, published March 16, 2001


TAMPA -- The new Republican majority on the Hillsborough County Commission set a tone three months ago when it delayed an automatic sales tax increase to pay medical costs for the poor.

But a report released this week shows that the county's indigent health plan may go broke within two years even with the tax increase. And now, even a citizens advisory committee that has advocated expanding the program is considering where to recommend cutbacks.

Commissioners who supported the delayed tax increase said the new report underscores the need for an audit of the health plan, which they also approved in December. The review by the Clerk of Courts office is under way.

"That should tell us what is going on so we can best prepare for the future," said Commissioner Jim Norman, who first suggested postponing the tax increase.

Just the same, Norman said the timing of the report appeared political. County Administrator Dan Kleman had presented commissioners with numbers that showed the health plan's rainy day surplus shrinking without a tax increase, but not disappearing for a while. And then it would spring back when the increase was enacted, possibly next year.

Kleman said Thursday the differing reports are just varied views of a murky future.

"I think what is significant are the projections that show that expenditures are growing faster than revenues," Kleman said. "I think what's important is we're going to have to look at those expenditures being restrained."

Commissioners created the health plan in the early 1990s by passing a half-cent sales tax to cover medical expenses for poor people not covered by other state and federal programs. They lowered the sales tax to a quarter-cent in 1997.

But an automatic trigger was supposed to restore the half-cent tax late last year, when the health plan's surplus fell to $77-million.

During a contentious December meeting, Norman and other commissioners argued that the surplus was too large and initially moved to delay the increase until 2002. Under a compromise proposal by Commissioner Chris Hart, the board voted 4-3 to delay the increase until Oct. 31 and request a review of the health plan's books.

In the meantime, county staff asked Wakely Consulting Group of Clearwater to come up with financial projections for the health plan if no changes are made.

The consultants developed three scenarios. Only under the most rosy picture, in which average monthly enrollment in the program actually falls from its current level of about 19,500, does the health plan continue to break even.

Under the scenario described by Wakely as most likely, enrollment increases only slightly, then plateaus at 20,000. Expenses would grow from $78.5-million last year to an estimated $113.9-million in 2004. That year, the plan would lose $13.9-million.

The most dire prediction has the health plan losing about $14.5-million by 2003.

Stacey Easterling, a newly elected commissioner who supported the compromise plan to delay the sales tax increase, said she wants to see how the county is spending its current allocation before approving more money.

"This is our biggest budget outside of the Sheriff's Office," Easterling said. "I think the consensus was, let's make sure we're spending it right."

Recognizing the majority view of the commission, a citizen's advisory committee plans to meet next month to discuss options it can recommend to commissioners. Among the options they will discuss is limiting eligibility for the health plan.

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