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Fact-checking Rick Scott on the health care law

Gov. Rick Scott discusses the proposed Medicaid expansion July 2, 2012, on CNBC's "Squawk Box." Gov. Rick Scott discusses the proposed Medicaid expansion July 2, 2012, on CNBC's "Squawk Box."

Gov. Rick Scott discusses the proposed Medicaid expansion July 2, 2012, on CNBC's "Squawk Box."

Angie Drobnic Holan
By Angie Drobnic Holan July 3, 2012
Katie Sanders
By Katie Sanders July 3, 2012
Aaron Sharockman
By Aaron Sharockman July 3, 2012

Florida Gov. Rick Scott opposes the federal health care law, and he wants the world to know it.

So he embarked on a media blitz over the weekend, appearing on Fox News, CNN and CNBC. At each stop, he announced that he had no intention of expanding Medicaid, a health insurance program for the very poor. He also said he wouldn’t allow the state to open health insurance "exchanges," places where consumers will comparison shop for health insurance.

But in expressing his strong opposition to the Affordable Care Act, Scott also got his facts wrong. He gave a one-sided and misleading account of how much the Medicaid expansion would cost the state, badly misrepresented requirements on small businesses and used a widely debunked talking point about "rationing."

Scott entered the political realm in 2009 by heading up Conservatives for Patients’ Rights, a group that attacked President Barack Obama’s health care proposals. PolitiFact Florida previously has fact-checked several inaccurate comments from Scott about the Affordable Care Act, including that it is not the "law of the land," that it will be the biggest job-killer ever and that it is the biggest tax increase in the history of the United States. (All were rated False.)

Scott actually fared worse on the Truth-O-Meter this time.

The Medicaid expansion

One of the reasons Scott announced that Florida would opt out of an expansion to Medicaid is that the expansion would cost the state an additional $1.9 billion a year.
He repeated the figure at least four times in national television interviews, and again in a press release.

Don’t believe it.
Scott’s Medicaid figure is an oversimplified estimate that relies on several assumptions and ignores how the Medicaid expansion would actually be implemented as part of the health care law. Even if you believe the assumptions and ignore how the law would be implemented, Scott is still quoting the wrong number, according to the most recent estimate created by his own Agency for Health Care Administration.

Medicaid is a joint state-federal, government-run health care program for the very poor. (Its cousin, Medicare, is for senior citizens of any income level.) Medicaid is an entirely voluntary program for the states -- but every state participates -- in part because of the good financial terms. The federal government covers about 55 percent of all Medicaid costs in Florida and covered about 68 percent in recent years with additional stimulus funding.

The health care law required states to expand eligibility to Medicaid by raising income eligibility limits to 133 percent of the federal poverty level. States currently have widely varying thresholds depending on a person’s age and situation, and Florida has some of the strictest thresholds in the country. For instance, childless adults cannot receive Medicaid in Florida, and parents who have children must make less than 22 percent of the federal poverty level to receive Medicaid.
The federal government agreed to fund 100 percent of the cost for states to expand Medicaid for three budget year. The federal government would cover 95 percent of the costs in 2017, 94 percent of the costs in 2018, 93 percent of the costs in 2019 and 90 percent of the costs in 2020 and beyond.

The expansion was technically voluntary, but the federal government said it would penalize any state (by withholding Medicaid funds) that failed to comply. That penalty was declared unconstitutional by the U.S. Supreme Court.
The court’s ruling allows states like Florida to decline expansion without losing any current federal funding.

That brings us back to Scott.

The most recent estimate from the state health care agency -- from January 2012 -- says a series of changes to Medicaid could wind up costing about $1.4 billion a year, but that number includes several things beyond the expansion to Medicaid that Scott was talking about.

For instance, about $400 million is tied to increased reimbursement payments to Medicaid providers. But the state isn't required to pay that out as part of the health care law.

Another $516 million of the estimated $1.4 billion will pay for people who are eligible for Medicaid right now but not yet enrolled. Those people can enroll whether or not Scott gets Florida to opt out of the expansion.

In the end, that leaves about $500 million in estimated new costs for Medicaid patients under the federal government expansion.

And that cost -- which at least one health care advocacy group has questioned as "hyper-inflated" -- would not fully kick in until 2020.

So yes, the Medicaid expansion will cost the state.
But Scott’s $1.9 billion estimate appears to be wildly high. We rate his claim False.

A small business out of business?

Scott bungled more basic facts about how the law worked.

"I was in a business the other day, and they walked up to me and they said, ‘Governor, is this really going to become the law?’ " Scott told Fox News host Greta Van Susteren on Friday. " ‘Because if it does, we’re out of business. We have 20 employees. We know we won’t be able to buy any health care for anybody.’ "

Scott’s story was similar to one he told in Tampa earlier that day and at the Reagan Day Dinner of Pasco County Republicans that night. Scott told attendees at the dinner he was stopping in for a Blizzard at Dairy Queen when he was asked about the law.
A Tampa Bay Times reporter tracked down a Dairy Queen owner in Tallahassee who said he recently talked with Scott about how complying with the law would hurt his business.
The owner, Jamshaid Mohyuddin, 47, said he told the governor that he couldn’t afford to provide health insurance to his 16 employees.
"I'm a businessman myself, and I don’t even have health insurance," Mohyuddin said. "I can’t afford it."
Scott encouraged him to link up with other business owners to support Mitt Romney's campaign for president, Mohyuddin said.
Scott’s communications staff didn’t respond to our questions about the identity of the business owner. Really, though, it’s not so important for the purposes of this fact-check.
What’s important is this: They are mistaken. Businesses with fewer than 50 full-time employees are not required to offer coverage. (See sections 1513 and 4980H of the Affordable Care Act).
For larger companies, those with 50 or more full-time employees, there are fines if they do not offer insurance and one of their employees qualifies for government-subsidized insurance.
But again, small employers don’t face those fines. We rated Scott’s comments Pants on Fire.

While there are no penalties for small businesses like the one Scott described, the law offers tax credits for these employers if they decide to offer coverage.
Employers with fewer than 25 employees, whose average annual wages are below $50,000 and offer health insurance, qualify for a tax break of no more than 35 percent. That cap will be lifted to 50 percent in 2014.
The law also creates a health insurance exchange for small businesses, with the idea being they can comparison shop for plans.
Mohyuddin was elated when a reporter told him that the law exempts him from penalties for not offering health insurance.
"That helps me a lot," Mohyuddin said. "I always thought I had to do this."


In several interviews, Scott repeated the claim that the health care law rations care. On Fox News on Monday, Scott said driving down the costs of health care should be left to the free market, and that expanding health insurance programs to the uninsured was a bad idea.

"Insurance is not the answer. (The answer is to) drive down the cost of health care. You have insurance in places like U.K. and Canada, where they say, oh we cover you. But you don’t get it, because it’s rationed. That’s what’s going to happen," Scott said.

Scott’s answer is problematic on several levels. For one thing, people in the United Kingdom and Canada might have to wait for appointments, but they do receive care.

More significantly, Scott implied that the types of systems in Canada and the United Kingdom are what’s going to happen under the current health care law. That’s not the case.

In Canada, the government pays the bills for health care for everyone. The closest comparison for this country would be if Medicare (the health insurance program for people over age 65) were extended to everyone. In the United Kingdom, the government runs the National Health Service, directly owning hospitals and employing doctors.

The health care law does neither of those two things. Instead, it leaves in place the current systems of Medicare, Medicaid and employer-provided insurance. It expands Medicaid coverage for the very poor, and offers credits to people of modest means to buy insurance on their own. To make those purchases easier, it creates health insurance exchanges, where plans have to meet minimum standards and explain their coverage in plain language.

Scott also said the law results in "rationing." Here’s the bottom line: The health care law rations care no more nor less than the current health care system does.

The current health care system  -- whether it’s private insurance, Medicare or Medicaid -- does not allow people to have all the health care they want. Under the new law, people still can’t have all the health care they want.

We rated Scott’s statement False.

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Fact-checking Rick Scott on the health care law