Obama Administration Proposes Big Cuts in Florida Medicaid Fight

The feds proposed a big cut, but reiterated that Medicaid expansion would soften the blow.

DAVIE, FL - MARCH 28: Florida Governor Rick Scott speaks to the media as he attends the ribbon cutting for the opening of a I-595 Express Project on March 28, 2014 in Davie, Florida. The Governor finds himself dogged by questions about recent resignations by one of his top fundraisers, Mike Fernandez, as well as Gonzalo Sanabria, a longtime Miami-Dade Expressway Authority board member, who is reported to have resigned Thursday from his post to protest the disparaging and disrespectful treatment of Mike Fernandez, the former co-finance chairman of Gov. Rick Scotts campaign.' (Photo by Joe Raedle/Getty Images)
National Journal
May 21, 2015, 1:18 p.m.

The Obama ad­min­is­tra­tion is keep­ing the pres­sure on Flor­ida to ex­pand Medi­caid un­der the Af­ford­able Care Act.

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.

The Flor­ida Sen­ate was on­board with ex­pand­ing Medi­caid this year, but the House balked and the situ­ation de­teri­or­ated from there. Gov. Rick Scott, a Re­pub­lic­an who en­dorsed ex­pan­sion, re­versed his po­s­i­tion and then sued the ad­min­is­tra­tion, al­leging that CMS was il­leg­ally co­er­cing the state in­to the ex­pan­sion. The Flor­ida le­gis­lature ad­journed this month without passing a full budget and will re­con­vene in June to try to fin­ish the job.

CMS had long warned Flor­ida that it would not con­tin­ue to fund LIP, which helps hos­pit­als that provide a lot of un­com­pensated care to the un­in­sured, at the cur­rent level when many of the same costs would be covered if the state ex­pan­ded Medi­caid un­der Obama­care. About 800,000 low-in­come Flor­idi­ans would be in­sured through the ex­pan­sion. It has also told oth­er states, in­clud­ing big ones such as Texas, that the same prin­ciple will ap­ply when their sim­il­ar un­com­pensated care pools come up for re­new­al.

Now the agency has put a dol­lar fig­ure out there.

CMS pro­posed a 55 per­cent cut to LIP next year, from $2.16 bil­lion in com­bined state and fed­er­al fund­ing this year to $1 bil­lion, and then an­oth­er cut, to $600 mil­lion, the fol­low­ing year. The agency em­phas­ized that the pro­gram had pre­vi­ously been giv­en $1 bil­lion from 2006 to 2013 be­fore be­ing bumped to $2.16 bil­lion last year and that there were oth­er steps Flor­ida could take to bring in more fed­er­al money out­side of LIP, such as in­creas­ing pro­vider pay­ment rates.

“This is a big cut,” said Joan Al­k­er, ex­ec­ut­ive dir­ect­or of the Geor­getown Cen­ter for Chil­dren and Fam­il­ies, who has fol­lowed the is­sue closely. “LIP is noth­ing the state should count on go­ing for­ward, I think that’s em­in­ently clear from CMS’s let­ter today. Even if they got LIP, LIP doesn’t give health cov­er­age to a single per­son.”

Flor­ida Re­pub­lic­ans were re­served in their ini­tial com­ments on the CMS let­ter, though they showed some op­tim­ism that it would help re­solve the budget im­passe.

“We are re­view­ing the let­ter and seek­ing ad­di­tion­al cla­ri­fic­a­tion from AHCA and CMS. I look for­ward to provid­ing you in­form­a­tion as soon as I can,” House Speak­er Steve Crisafulli told his caucus, ac­cord­ing to Sun­shine State News. “Un­til then, I be­lieve the clear in­dic­a­tion be­fore the spe­cial ses­sion is Flor­ida will re­ceive a sig­ni­fic­ant level of LIP funds, which will help us in our ef­forts to fin­ish the budget by the Ju­ly 1 dead­line.”

The CMS let­ter isn’t quite a take-it-or-leave-it of­fer to the state, Al­k­er said. But she noted that the fed­er­al agency cri­ti­cized some ele­ments of the LIP pro­pos­al that the state had made.

“That sig­nals to me that they’re pretty ser­i­ous about the num­ber,” she said.

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