The federal government agreed on Wednesday to renew a state program that repays hospitals for care they provide to the uninsured, a move that could offset state cuts to hospitals and bridge a gap in the state budget.
Gov. Rick Scott announced that the Trump administration would allow a $1.5 billion Low Income Pool in next year’s state budget. That pot of money, which includes local tax dollars and federal matching money, was set to expire. It has been part of broader negotiations between the state and federal governments over Florida’s Medicaid program.
“Working with the Trump Administration to secure a commitment of $1.5 billion in LIP funding for our state will truly improve the quality and access to healthcare for our most vulnerable populations,” Scott said in a statement.
As recently as three years ago, LIP was a $2.1 billion a year program that reimbursed hospitals for some of their uncompensated charity care.
However, in an effort to coax Florida into expanding Medicaid under the Affordable Care Act, the Obama administration in 2015 announced it planned to end the program. That year, the Florida House blocked an attempt to expand Medicaid, and the feds agreed to a smaller pool of money that would expire this year.
State Senate Democrats tried again to expand Medicaid to include roughly 800,000 Floridians who earn too much to qualify for the program but not enough to afford their own health insurance. It was voted down Wednesday.
Federal officials said they were restoring a portion of the LIP program in an effort to give the state more autonomy on Medicaid spending.
“From day one, we have been committed to working with our state partners to ensure they have the flexibility they need to make decisions that best reflect the unique needs of their populations,” Health and Human Services Secretary Tom Price said in a statement.
President Donald Trump, who Scott endorsed and campaigned for, came into office promising to repeal and replace the Affordable Care Act. Though that process stalled last month, restoring LIP is a move away from the Obama administration’s insistence that Florida expand Medicaid.
In Tallahassee, federal support for LIP could help bridge one of the major gaps separating the House and Senate’s proposed budgets. Under the Florida House’s proposed budget, hospitals would face $621.8 million in cuts. The Senate plan calls for a $258.6 million cut.
As lawmakers considered the annual state budget Wednesday, House leaders cautioned that there could be federal rules for how the money is handed out.
“The devil will be in the details because there may be guidelines on what we can do with certain things,” said House healthcare budget chair Jason Brodeur, R-Sanford.
Senate health budget chairwoman Anitere Flores, R-Miami, said she wanted to see all $1.5 billion spent on providing care to people in need. However, she said the extra money could give the state flexibility to fund other healthcare priorities.
Hospitals praised the move, which could help them avoid major cuts. However, the impact on each hospital is not yet clear, and some could still lose money depending on how the money is allocated and whether state lawmakers push for additional Medicaid funding cuts.
“The LIP funding helps our safety net hospitals carry out their mission of providing highly specialized, expensive and primary care to all citizens, regardless of their ability to pay,” said Tony Carvalho, president of the Safety Net Hospital Alliance of Florida.
Jackson Health spokesman Matthew Pinzur called the announcement “good news for safety net hospitals like Jackson that do so much work on behalf of the uninsured and under-insured.”
“Anybody who has a stake in public health care should feel good about this,” he said.
But Pinzur said it was too soon to tell exactly what the agreement would mean for Jackson’s budget. That will depend on how the money is distributed, he said, and whether the legislature decides to cut Medicaid reimbursement rates.
“The impact of this is going to depend very heavily on the details,” he added. “It’s one piece of a very large and complicated puzzle, but it is absolutely a move in the right direction.”
Herald/Times staff writers Mary Ellen Klas and Kathleen McGrory contributed to this report.
Contact Michael Auslen at firstname.lastname@example.org. Follow @MichaelAuslen.