Florida legislators may have ended their stalemate last week when they agreed to convene a three-week special session to resolve the budget crisis in June, but they didn’t agree on the hard part: how to resolve stark differences over health care.
Some compromise ideas are emerging — from using $600 million intended for tax cuts to bail out hospitals that treat poor patients, to seeking a one-of-a-kind federal waiver, to drawing federal money without passing it through Medicaid.
But finding the middle ground won’t be easy because of the deep ideological divide between House and Senate Republicans over whether or not to expand Medicaid to draw down federal money to provide healthcare for more than 800,000 uninsured residents who must otherwise rely on charity care.
“Ideologies are going to have to be on the back burner and good public policy that satisfies both sides is going to have to prevail,’’ said Rep. Holly Raschein, a Key Largo Republican whose district has among the state’s highest number of uninsured. She is among a minority of House Republicans who support taking federal money if it’s tied to an aggressive health care reform plan that reduces costs.
At the heart of the health care funding dispute is a federal program known as the Low Income Pool, or LIP, that reimburses Florida hospitals and clinics $2.1 billion for providing care to low-income or indigent patients. The federal government is phasing the program out as it shifts to new programs provided by the Affordable Care Act, or Obamacare.
The Senate wants to draw down the federal Medicaid money to help the uninsured purchase coverage on the private market as the LIP funds are phased out. But the House rejects that idea, arguing that Medicaid is a “broken” program that already consumes one-third of the state budget and will likely cost the state more if expanded.
The legislative session ended abruptly April 28 when the House adjourned in protest over the impasse.
If the House were to have its way, the federal government would send the state another $1.3 billion in LIP money to reimburse hospitals for charity care for another year. Congress would repeal Obamacare and send Florida a “block grant” of money to flow directly to patients and their doctors. The state would end regulations that prevent competition for expensive hospital services — like trauma care — and regulators would open the door for consumers to buy health insurance across state lines.
If the Senate were to get its way, Florida would create a private market alternative to Obamacare to bring Florida $51 billion in Medicaid money to cover those ineligible for coverage under the federal exchange. It would require the uninsured to work, and it would make them sign an agreement to show they understand that, if the federal government rules change, they could lose their insurance.
Neither scenario is likely.
Anchored by a rancorous Republican political feud that has Republican Gov. Rick Scott siding with the House in opposing Medicaid expansion, neither side is willing to let the other side be a clear victor, though House and Senate leaders are engaged in behind-the-scenes negotiations.
“The House has stated their position — they want to reduce costs. The Senate has stated their position — they want to increase access. The art of compromise is coming up with a solution that has both components in it,’’ said Sen. Rene Garcia, R-Miami, chairman of the Senate budget committee on health care who has spent the week negotiating options.
Warns Rep. Heather Fitzenhagen, R-Fort Myers: “Because of the discord between both chambers, we’ve allowed the dialogue to focus on Medicaid expansion and LIP instead of focusing on the delivery of health care services.”
Fitzenhagen agrees with House leaders who focus on reducing the cost of health care. She supports increasing competition by building recovery centers and 24-hour ambulatory surgery centers. She wants to make it easier for consumers to comparison shop for health care, use technology such as telemedicine, and allow nurse practitioners to have a broader role.
Some of those proposals have also advanced in the Senate and, Fitzenhagen said, “if the Senate says yes to these options, the House has to compromise on their issues too,’’ she said.
Among the ideas that may find common ground in the Legislature:
The Senate’s initial plan expanded coverage to the uninsured by enrolling them in an expanded Medicaid program for six months and then shifting them into a private exchange. But House leaders call that a “Trojan Horse” designed to hook people into a federally-controlled system that the state will become dependent upon.
Under one proposal being floated, the Senate would modify its plan and bypass the Medicaid stage — a change that would require federal approval. In return for drawing down the federal money to expand coverage, the state would impose strict cost controls.
The Florida Chamber of Commerce supports the idea, arguing that on average Florida hospitals shift 8 percent of the cost of low-income patients to those with private insurance.
“Hopefully a grand bargain can be put together that expands coverage to the uninsured or under-insured using federal dollars, reduces costs, and then eliminates the cost shift,” said Mark Wilson, chamber president.
Linda Quick, president of the South Florida Hospital and Healthcare Association in Broward County, believes one solution lies in having Florida agree to Secretary of Health and Human Services Sylvia Burwell’s goal of “coverage over care” by having the federal money follow the uninsured patient, not the health care system.
Legislators could ask the federal government to continue funding LIP but have charity care paid for by the patients who receive it — in the form of a health care card — rather than retroactively reimbursing hospitals,’’ she said.
“How much any one institution got would depend on people’s choice,’’ she said. People insured by the card would have to be encouraged to use it for preventive care, instead of relying on emergency rooms, but “the reimbursement should follow the patient.”
New federal waiver
Alan Levine, a former health official in the administrations of Gov. Jeb Bush and Louisiana Gov. Bobby Jindal, urges legislators to ask the federal government to expand the LIP program for another year in exchange for a commitment to develop a health care coverage program based on a “State Innovations Waiver,” part of f the Affordable Care Act.
The provision is based on Section 1332 of the act, which gives states flexibility in using the money from federal tax credits to design their own health insurance and health care delivery systems.
Under the program, which begins Jan. 2017, states can use money from Obamacare — premium tax credits, cost-sharing reductions and small business tax credits — to expand coverage to the uninsured. But the programs must be comparable to the existing Obamacare offerings, remain affordable — and not cost the federal government any additional dollars.
“It’s a conservative answer for people who don’t want to federalize Florida’s health care system,’’ said Levine, now CEO of the the Mountain States Health Alliance in Tennessee, a not-for-profit health system. He also serves on the Florida Board of Governors.
“It allows you to waive a lot of the negative things you don’t like about Obamacare — the mandates and benefits packages, the individual and employer mandates,’’ he said.
The downside: if the U.S. Supreme Court rules against the federal government in the King. v. Burwell this summer, Florida residents will lose their tax credits because Florida has not established a state health care exchange.
Plug the hole, buy time
Another option — offered by Gov. Scott — is for lawmakers to expect no federal LIP money and come up with the money elsewhere to help hospitals plug the hole left by the loss of federal funds. They would then wait until next session to return with another plan.
Where would the money come from? The House was prepared to spend $600 million in surplus state revenue that it originally proposed for tax cuts to fill the LIP hole. But Scott, who is eyeing a 2018 U.S. Senate run, wants the tax cuts and threatened to kill senators’ pet projects if they didn’t approve them.
Sen. Anitere Flores, R-Miami, spent the week appearing with House members on Spanish radio and television discussing the issue. “We do have common ground,’’ she said. “We just have to stop talking about our talking points and just realize we have to govern.”
Mary Ellen Klas can be reached at meklas@MiamiHerald.com or @MaryEllenKlas