Update: Gov. Scott's Medicaid Expansion Concerns Fueled By LIP Pool Uncertainty

Apr 6, 2015

Update: 5:18 p.m.:   Florida's Agency for Healthcare Administration says the last time it spoke with officials at the Federal Centers for Medicare and Medicare services was last Thursday. AHCA says the only thing mentioned was that CMS had not stopped negotiating with the state over the renewal of federal funding to hospitals for uncompensated care.

An AHCA spokeswoman says the state is still waiting on a day, date and time to continue negotiations. A spokesman for the federal government says they are waiting on the state to make a call.

Governor Rick Scott
Credit Executive Office of the Governor / State of Florida

Meanwhile, the chances of Florida using federal dollars to extend health insurance coverage to more than 800,000 Floridians just got more complicated. Governor Rick Scott says he’s not inclined to support more programs that the federal government could, “scale back or walk away from."

Florida and the federal government are currently in negotiations to renew a separate program that reimburses hospitals that treat low-income patients. The Low Income Pool program expires in June and the federal government has indicated it won’t be renewed at its current $2 billion price tag. That part of the discussion is clear.

 “They have been very clear” the federal government won’t renew LIP as it is now, because they told them [Florida] over a year ago, that it [LIP] is not going to continue," said Florida U.S. Senator Bill Nelson during a recent trip to Tallahassee.

The Florida senate has drawn up a new way to revamp the Low Income Pool funds regardless of how much the state gets. But that’s not enough to convince other Republicans to go along. The House isn’t including LIP funds in its budget proposals. Furthermore, the Low-Income Pool has gotten caught up in a separate debate over whether to draw down federal funding to insure up to 800,000 Floridians in what’s called the Medicaid coverage gap. Those people are largely working adults who make too much money for the state’s traditional Medicaid program, and not enough to qualify for federal subsidies to purchase insurance on their own.

But House Republicans remain opposed, led by their powerful Appropriations Chairman Richard Corcoran—who last week stated bluntly that the House would not accept the Senate’s plan to use the federal Medicaid money to steer people into privately-managed HMO plans run by a state-based insurance exchange.

“I don’t care what they package, what they send to us. When you unwrap the wrapping paper and take off the pretty bow," Corcoran told the House on Thursday. "When you open the present, what you’re giving the people of this state is Medicaid, and Medicaid doesn’t work.”

Federal health officials have suggested Florida could offset the loss of the $2 billion LIP program by accepting Medicaid expansion money—valued at $51 billion over the next decade. Last week the federal government’s key negotiator went on a break—throwing the state’s health budget negotiations in jeopardy as well. There’s also disagreement on whether talks between the state and the federal government are, or are not continuing. The federal government says they are. The state says they aren’t.

Florida Lawmakers acknowledge LIP and Medicaid are separate issues, that shouldn’t be tied together. But the relationship between the two programs has also become symbiotic, something noted by Governor Rick Scott.

In a statement, Scott says, “given that the federal government said they would not fund the federal LIP program to the level it is funded today, it would be hard to understand how the state could take on even more federal programs that CMS could scale back or walk away from.”

Florida’s is one of a few state’s that get LIP money, under an arrangement that predates Governor Rick Scott and the Affordable Care Act.

"They are two separate issues. The negotiations over the low-income pool will continue in any case. But they’re very related in the bigger picture of, 'what is the future of Florida’s healthcare system?’”  said Georgetown University's Joan Alker

Scott has repeatedly expressed concerns about the LIP funding, and believes the program should be renewed at current levels.  And the recent spat between the state and federal government over the program doesn’t give Republican’s confidence that the same situation won’t occur down the line if they agree to Medicaid expansion.

In a response to Scott’s concerns, Senate President Andy Gardiner issued a statement maintaining his support for the Senate’s LIP proposal and its Medicaid expansion plan. Gardiner says, “the Senate also shares the Governor’s commitment to tax relief and record funding for education; however, if our state is forced to make up the difference of $2.2 billion in hospital funding, every area of our budget will be impacted.”

The House and Senate have put forth upcoming budget proposals that are $4 billion apart due to their difference of opinion on healthcare policy.  

--

Breaking: Governor Rick Scott says he's no longer in support of using federal funds to provide health insurance to more than 800,000 Floridians. The announcement from the Governor's office comes as a key program that reimburses hospitals treating low-income patients,  is set to expire.

The Associated Press first reported the change in the governors position. In a statement, Scott says, "given that the federal government said they would not fund the federal LIP program to the level it is funded today, it would be hard to understand how the state could take on even more federal programs that CMS could scale back or walk away from."

Scott expressed a similar sentiment about the issue at the beginning of the legislative session.

The governor is referencing the ongoing negotiations over an extension of the state's $2 billion low-income pool, which provides supplemental funding to hospitals that treat uninsured and low-income patients. That funding, which Florida and only a few other state's get, expires in June, and the federal government has indicated it may cut the program. Federal health officials have also indicated the loss in funding under LIP could be made up if Florida used Medicaid money offered under the Affordable Care Act to insure up to a million uninsured people who fall into what's called the "coverage gap"--meaning, they make too much money to qualify for the state's traditional Medicaid program, and too little to qualify for subsidies to purchase insurance on the federal government's insurance exchange.

State health officials have been trying to negotiate an extension to the Low Income Pool, but last week key federal health officials went on vacation for two weeks,causing the conversation to stop.

So far, the Florida House and Senate are split. The Senate has crafted a plan to revamp the state's administration of the low-income pool and another that would allow the state to use federal Medicaid dollars to steer the "coverage gap" population into private health plans. But the House has neither federal health plan in its budget--leaving a nearly $4 billion gap between the two chambers in their budget proposals.

For more news updates, follow Lynn Hatter on twitter @HatterLynn