The Obama administration has offered Florida Gov. Rick Scott a
partial compromise in Scott's ongoing fight to get federal money for health care that's not Obamacare Medicaid expansion money. Scott has asked the administration to reverse its decision—made and communicated to the state a year ago—to end a demonstration program that funded a Low Income Pool, funds that went to hospitals providing charity care. The administration is coming part way.
On Thursday, it proposed cutting more than $1.6 billion over two years in funding for Medicaid's Low-Income Pool in Florida. The offer, made in a letter from the Centers for Medicare and Medicaid Services to state officials, signals public progress in the negotiations that have been ongoing for months in that there actually is something on paper.
The LIP program has been the linchpin of the administration's fight with the state over Obamacare. It would be getting cut whether the state expands Medicaid or not, but CMS reminded Florida yet again Thursday that expansion would help make up the revenue it's about to lose through LIP—about $2 billion annually, by some estimates—while covering hundreds of thousands of poorer residents.
"We believe that Medicaid expansion as evidenced by experience in other states would bring significant benefits to low income Floridians and the Florida health care system," the agency wrote.
That's a 55 percent cut to the LIP for next year, from $2.16 billion funding this year to $1 billion next year and then to $600 million the following year. From 2006-13 the state got $1 billion a year, then got the big bump up last year. CMS is clearly letting Florida know that they can't count on this money to bail them out in their next budget crisis. It's also a signal to other states, including Texas, whose LIP money will be up for renewal in the near future. This funding was never intended to be a permanent healthcare solution, especially so after Medicaid expansion passed with Obamacare.
What this means for Scott's bogus lawsuit against the administration isn't immediately clear, but House Speaker Steve Crisafulli told his caucus that he believes this funding could resolve the current budget crisis. The legislature reconvenes next month to try to come up with a budget and stave off the government shutdown Scott has been threatening.