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.