Capitol Chatter: July 13

Florida opts out, takes heat like summer
Florida led the legal charge against Obamacare and is now in the vanguard of reacting against one of the law's components after the U.S. Supreme Court ruled it constitutional in late June.
In the first fallout of the court's controversial ruling on the Affordable Care Act, aka Obamacare, Florida will opt out of expanding Medicaid coverage to save taxpayers $2 billion annually.

Gov. Rick Scott called the expansion of Medicaid and transfer of more money from the private sector to the public sector “inconsistent with the mission to grow jobs for Floridians.”

The court's ruling upheld the mandate portion of the massive health care law by calling the penalty a tax — a huge political issue in the presidential campaign. But the court also ruled against the law's portion that required states to expand their Medicaid coverage, adding that the feds cannot coerce states into expanding the coverage.

The problem is that Florida is already being swamped by the current growth in Medicaid spending. At $30 billion, health care eats up 43% of state spending. The monster part of that is Medicaid at $21 billion. The second largest portion of state spending is education, which is less than $13 billion.

Scott and Republicans fear that even if the feds pick up 90% of the cost as the law calls for now, that could still add billions to state spending. Plus, there is no guarantee that Congress won't shift a higher burden to states. So to protect education spending and other state programs, Scott is declining the Medicaid expansion — and seems to have support of Republican leadership.

Democrats attacked Scott's decision, arguing that the new government Medicaid spending would create jobs in Florida — as many as 60,000 — by the federal government.

But Scott made the TV rounds after his announcement. On CNBC's “Squawk Box” he said, “Right now you have a choice in Florida government. It's Medicaid, it's education or it's prisons. And Medicaid has been growing at three-and-a-half times our general revenue. So that has made it very difficult to fund our education.”

Obamacare tax will hit local manufacturers
A little known part of the now-constitutional Affordable Care Act is set to bite hundreds of Florida companies in January.

The law includes a 2.3% tax on manufacturers' gross revenues from the sale of medical devices — taking the money off the top and cutting into R&D, expansion and hiring.

The Cook Group, the nation's largest privately owned medical device maker, has co-sponsored a Web site called no2point3.com as a place for companies and individuals to urge Congress to repeal the law.

The House voted 270-146 to repeal the tax, with several Democrats voting with Republicans. But the bill has gone nowhere in the Democrat-controlled Senate.

The Gulf Coast is home to a host of medical device manufacturers such as Bausch & Lomb Pharmaceuticals and SRI/Surgical Express, both in Tampa, Hoveround Inc. in Sarasota and Arthrex Corp. in Naples. Plus, the Medical Manufacturer's Consortium is based in St. Pete.