A new analysis from the Florida Policy Institute (FPI) breaks down the impact of the FY 2022-23 budget on the state’s Medicaid population, long term care, and various safety net programs. Gov. Ron DeSantis signed the $110 billion budget in June 2022, an 8.3% increase from the FY 2021-2022 budget.
Health and Human Services (HHS) make up $48.8 billion of the state budget, up $4.3 billion from the last fiscal year. Most of the HHS budget (77%, or $37.6 billion) goes toward the state’s Medicaid program, with over 60% matched by federal funds. The Agency for Health Care Administration (AHCA) uses $25 billion of those funds for the Statewide Medicaid Managed Care program, which provides care for over 4 million Floridians.
FPI found that despite receiving an enhanced Federal Medical Assistance Percentage to support higher Medicaid caseloads during the COVID pandemic, thousands of Floridians remain in need of access to long-term care, behavioral health systems, and public health programs.
The FY 2022-23 budget fully funds current Medicaid caseloads, but cuts $300 million in critical care funding for 28 safety net hospitals in the state, which serve many uninsured, underinsured, and Medicaid beneficiaries. The budget does include some safety net hospital increases ($84.8 million for certain children’s hospitals and $156.2 million for cancer hospitals), but FPI critiqued the state’s high reliance on supplemental payment programs, such as the Disproportionate Share Hospital and Low Income Pool (LIP) programs. Many of these funds are federally matched, which could be reduced if state entities cannot raise their share.
“Hospital rate cuts underscore the ongoing challenges of unpredictable year-to-year funding to sustain sufficient hospital capacity to meet the needs of Medicaid beneficiaries and other underserved communities,” the analysis said. “If Florida lawmakers chose to expand the state’s Medicaid program, there would be millions more in stable federal funding available to support hospitals.”
FPI also critiqued the lack of sufficient funding for home and community-based services (HCBS). Demand for HCBS has “increased substantially” since the onset of the pandemic, particularly among older, homebound residents, the analysis said. While the FY 2022-23 budget adds a combined $80.5 million to take people off the waitlist for 3 HCBS programs, they only partially address the significant demand for services.
For example, $59.5 million would serve approximately 1,120 individuals on the waitlist for the Agency for Persons with Disabilities (APD) waiver, which provides medical, behavioral and residential services for those whose daily lives are affected by early onset developmental disabilities. However, 22,759 individuals are on the waitlist, and many would remain in need of services even with the funding.
The analysis also found programs that received no additional funding to reduce their waitlists. These include the SMMC-LTC program, which provides a robust set of long-term care services and has a waitlist of over 54,000 Floridians, and the Home Care for the Elderly (HCE) waitlist, which provides subsidies for the caretakers of seniors in private home settings. The HCE program has a waitlist of over 15,000 Floridians.
The budget does include a $15-per-hour minimum wage for health care employees working for
Medicaid providers, slated for Oct. 1st, 2022. It also included a $293 million (or 7.8%) increase in Medicaid reimbursement rates for nursing homes, to be translated into higher all staff wages. AHCA has the authority to transfer these funds to the SMMC-LTC waiver, which could help take more people off the waitlist.
FPI warned that underinvestments in health and economic services could continue to impact vulnerable Florida families. As of May 2022, 18% of Florida families with children reported a loss of employment income, 26% reported little to no confidence in their ability to pay their next rent or mortgage payment, and 22% reported not having enough food to eat during the week, according to the US Census Bureau Household Pulse Survey. FPI said these circumstances also disproportionately affect Black and Latina/o households in Florida.
“Many economists warn that the U.S. is headed for another recession in 2023, and another lesson of the COVID-19 recession is how precarious shared resources are to any disruptions,” the analysis said. “Without the massive influx of federal pandemic relief dollars, the hardships Americans faced would have undoubtedly been much more severe.”