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Medicaid expansion is key to combating state budget deficit

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Opinion

By Diane Dimperio/Chair, Health Care Action Team, Florida League of Women Voters

The good news is that Florida will not have a five-billion-dollar deficit in the fiscal year that begins July 1, 2021. The bad news is that state economists are predicting a 3.3-billion-dollar deficit. Since the instinctive reaction to a budget deficit is to cut spending, the governor has already asked state administrators to submit reduced department budgets. Florida's biggest spending categories are health and human services and education. How, at a time when thousands of people are losing jobs, receiving eviction notices, getting sick, and dying, can we think about reducing health and human services? How, when children have been wrenched out of classrooms, forced to sit in front of a screen all day then returned to the classroom with a mask and bottle of hand sanitizer, looking for their beloved teachers who are retiring instead of being required to face children to whom they have devoted their lives, can we think about cutting funding for education?

States have to live within their incomes and can’t borrow money for operations, so, if Florida doesn't want to gut desperately needed services, legislators need to find ways to increase income.

The Florida Policy Institute has identified over four billion dollars in revenue proposals that would more than balance the budget. Some of these proposals would close the corporate loopholes that make Florida “business-friendly” and that may be controversial. But, let’s think about small businesses. Small businesses, often referred to as the backbone of the Florida economy, have been responsible for creating 60% of all new jobs since 2012. Due to the pandemic, 85% report a loss of revenue, over 74% reported shutting down and 40% have reported closing permanently. There is widespread anxiety among small business owners, many of whom have invested everything they have in their business.

The Small Business Majority, an organization that empowers America’s entrepreneurs to build a thriving and inclusive economy, has developed a Roadmap to Recovery During and After the Corona Virus Crisis. One of their recommendations is expanding Medicaid, which is described as “vitally important” for low-income entrepreneurs and small business employees.

Medicaid expansion is a key policy initiative that would provide the financial stimulus Florida needs to begin to recover from the pandemic. It would provide needed health care for those suffering from Covid-19, but also has proven economic benefits. Medicaid expansion offers financial benefits to the uninsured, who can pay off and avoid future medical debt, are less likely to file for bankruptcy and, are better able to work. County governments would pay less for indigent health care and incarceration, as well as experience a resurgence of small businesses and higher rates of employment. Hospitals would have less uncompensated care and be less likely to close. The state will reduce the amount of tax dollars spent on Medicaid match by almost two million dollars and will generate over four billion dollars in new federal funds. This new money will be distributed throughout the state to pay for health care and will result in six to over seven billion dollars in total economic activity. We have never before been faced with an economic and health crisis like this. It is time for our state legislators to take bold and effective action to support Florida citizens and jump-start the economy.

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