Another Florida healthcare crisis

The rejection of federal funds for Medicaid expansion by leaders in Tallahassee was never a smart decision. Now it looks even worse as the feds prepare to shut down a healthcare pipeline that pours about $1.3 billion into a statewide program that aids hospitals that care for Florida’s neediest.

Federal subsidies for “safety-net” hospitals — under a program known as LIP, the Low Income Pool — are set to expire at the end of June. LIP mitigates the cost of providing healthcare to the under-insured and uninsured. It’s being eliminated because the Affordable Care Act was supposed to reduce the need for such supplemental funding by increasing the number of Americans with healthcare coverage.

One way the ACA would achieve that goal was by expanding eligibility for Medicaid, the state-federal healthcare program for the poor and disabled. To ease the financial burden on states, the federal government has offered to pay for the cost of Medicaid expansion — as much as $5 billion a year through 2024 for Florida.

But when state legislators rejected the offer, they made no provision for replacing LIP, believing they could ignore sweeping healthcare reform and continue with business as usual.

The result is a full-blown crisis. Without Medicaid expansion or a replacement program for LIP, hospitals that treat Florida’s most vulnerable populations will be significantly worse off. So will their patients. Officials at Jackson Health System, Miami-Dade’s safety-net hospital network, told the Editorial Board that the elimination of LIP will blow a $200-million hole in its annual budget. It already receives more than $350 million a year in local tax support.

It’s time for state leaders to face up to the consequences of their actions. They’ve known since last year that LIP would be eliminated, but did nothing about it. Gov. Scott even unveiled a budget proposal last month chock-full of tax cuts based on the presumption that the $1.3-billion federal share of the state’s LIP program would still be available.

Except that it isn’t, making Mr. Scott’s budget unrealistic.

The state is now negotiating with the federal government to design a new program to preserve funding for hospitals like Jackson. Most experts believe Florida has waited too long, though. LIP runs out in four months, leaving little time to create an alternative.

Other states, including New York and California, have managed it, but first they accepted Medicaid expansion. Those states get both the federal funds that come with that decision plus additional help for hospitals that treat the poor and uninsured. But unlike Florida, they began negotiating with the feds long ago.

State Senate Appropriations Chairman Tom Lee, R-Brandon, said last week’s announcement by the federal Centers for Medicare & Medicaid Services had sent lawmakers “back to the drawing board.” He conceded, however, that the state will have “to modify our current operating mode” to win federal approval for a new program. Others say the feds wouldn’t dare put Florida’s public hospitals in jeopardy.

Why take the risk? Instead of playing chicken with the federal government, Mr. Scott and the Legislature should bring Florida’s tax dollars home by expanding Medicaid and by doing whatever it takes to meet requirements for a successor to LIP. It’s fiscally irresponsible of them and harmful to Florida’s residents and its hospitals to block progress on healthcare reform — especially since they don’t have a better idea.