A potential budget crisis is fueling a new conversation about Medicaid expansion in Florida.
The issue was a non-starter in 2014, largely because House Republicans oppose expanding Medicaid as envisioned under the Affordable Care Act. But Florida now risks losing a separate pot of federal money known as the Low Income Pool that helps hospitals like Jackson Health System treat uninsured patients.
Senate President Andy Gardiner, R-Orlando, said the potential $1.3 billion loss in funding has given lawmakers a reason to reconsider Medicaid expansion.
“We have an obligation to look at this issue,” Gardiner said.
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It will still be a tough sell in the Florida House.
House Speaker Steve Crisafulli on Tuesday said the federal government wasn’t offering enough flexibility on how to spend the $51 billion available to extend health insurance coverage in Florida to cover an estimated 800,000 people.
“We feel like some progress has been made in that arena,” said Crisafulli, R-Merritt Island. “But at this point in time, we are not interested in expanding Medicaid as we know it.”
The state healthcare budget will be one of the most closely watched issues of the 2015 legislative session.
The LIP program is set to end June 30 under an agreement with the U.S. Centers for Medicare and Medicaid Services, a federal regulatory agency. The state is hoping to reach a deal with the federal government on a successor program that would continue funding Florida hospitals that treat large numbers of uninsured, under-insured and Medicaid patients.
If no agreement is reached, expanding Medicaid eligibility could help cover some of the healthcare costs for poor Floridians, but the state would still need to help fund those safety-net hospitals because Medicaid consistently pays providers less than cost.
“If the negotiations don’t go our way, we need to have options,” Senate Health Policy Chairman Aaron Bean said.
Gov. Rick Scott ratcheted up the pressure Wednesday, writing President Barack Obama to say he would oppose the use of state dollars to backfill the LIP program.
“Florida taxpayers fund our federal government and deserve to get a return on their investment,” he wrote. “Moreover, we have worked hard to turn Florida’s economy around and cannot afford to fund programs started by the federal government.”
Still, Scott said he was hopeful about the ongoing negotiations.
“We are optimistic that you will not terminate LIP and we will be able to reach an agreement on how best to structure this program in a way that protects both our state’s most vulnerable residents as well as state and federal taxpayers,” he wrote.
Later in the day, the Senate Health Policy Committee used the LIP issue as a jumping off point for a conversation on Medicaid expansion.
The panel heard testimony from a bipartisan coalition of business groups and lawmakers known as a Healthy Florida Works. The group has a plan to extend healthcare coverage by creating a Florida-specific exchange where insurance companies can offer health plans and receive a fixed monthly premium per beneficiary. The beneficiaries would be required to pay monthly premiums, and either search for employment or enroll in job training programs.
The Florida Chamber of Commerce also expressed support for Medicaid expansion, but said spending on the program should be limited to 32 percent of the state budget.
“It’s complicated, it’s controversial, it’s not popular,” President Mark Wilson told the panel about his proposal. “But we’re talking about lives, we’re talking about the state budget, and we’re talking about making Florida healthy.”
Some attendees, however, said Florida should explore other options.
Sal Nuzzo, of the conservative James Madison Institute, called Medicaid “inefficient,” and urged lawmakers to focus on policies that support telemedicine and medical education programs.
“If we were to move forward with concrete reforms in the healthcare arena, as opposed to expanding a broken socialized program, we would generate the kinds of solutions that would make it such that Medicaid expansion wouldn’t be necessary,” he said.
Gardiner, the Senate president, said he’s not sure where the debate will lead.
“I haven’t read the last chapter on this one,” he said. “We, at least in the Senate, will have a discussion [to see] if it is the best way to go for Florida.”
The talk in Tallahassee over possible Medicaid expansion came the same day U.S. Supreme Court justices questioned lawyers in the latest politically charged fight over the Affordable Care Act. At issue: whether Obamacare beneficiaries in states like Florida without a state-run exchange are eligible for the tax subsidies that make the federal health insurance program more affordable.
U.S. Rep. Kathy Castor, D-Tampa, attended the oral arguments in Washington.
Castor said she was “heartened” by Gardiner’s comments about discussing Medicaid expansion.
“I would hope the Legislature takes a really hard look at the creative proposals that have been brought forward,” she said.
Herald/Times staff writers Alex Leary and Michael Van Sickler contributed to this report.
Contact Kathleen McGrory at kmcgrory@MiamiHerald.com.