George Gibbs Center for Economic Prosperity

Flor⁠i⁠da Today: S⁠t⁠a⁠t⁠e heal⁠t⁠h care fund⁠i⁠ng deba⁠t⁠e has b⁠i⁠g Brevard ⁠i⁠mpac⁠t⁠

By: The James Madison Institute / 2015

State health care funding debate has big Brevard impactIlana Kowarski, FLORIDA TODAY 4:46 p.m. EDT April 24, 2015For Brevard County’s hospitals and medical professionals, the health policy decisions made in Tallahassee during the upcoming weeks could have enormous financial implications, since they are at risk of losing about $10 million dollars in annual federal funding for the uncompensated care that they provide to the county’s neediest.Last year, the Obama administration offered a one-year-extension of Florida’s $1.3 billion annual federal “Low Income Pool” grant, which helps hospitals with the costs of treating low-income or uninsured patients. But the administration said this grant would expire on June 30, 2015.The rationale given was that Florida’s low-income, uninsured residents would be better served by federal funding for Medicaid expansion, which would provide many of these individuals with health insurance, than by the continuation of the Low Income Pool program. But Florida is one of the 21 states that opted not to expand Medicaid to cover more low-income residents.Bonnie Ladd, an unemployed single mother in Titusville, is one of the county’s 17,500 residents who could gain health insurance through Medicaid expansion.“I wouldn’t have to worry about getting sick or how much it would cost to go to the doctor to check on something,” Ladd said. “I would have a healthier outlook, because I could afford it. If it wasn’t so expensive to go to the doctor, people would go all the time to make sure they were healthy.”Since Florida has not expanded its Medicaid program, Brevard hospitals say that their share of the federal Low Income Pool is more critical than ever to ensuring equitable access to health care.“The intent of the Low Income Pool,” also known as LIP, “is to help the state’s large Medicaid and uninsured population maintain access to essential hospital services,” said Diana Solis VanDeMark, a spokesperson for Wuesthoff Health System. “A decrease in overall funding will create additional hardships for all health care providers in Florida. Regardless, Wuesthoff Health System is committed to providing medically necessary emergency care for anyone who needs it, whether or not they have insurance or the ability to pay for services.”Matthew Gerrell, a spokesperson for Health First, said that they were carefully watching the health care funding debate in Tallahassee. “We plan to monitor the proceedings and impact for Brevard,” he said. “As always, Health First is committed to providing the highest quality care and service for our community.”Parrish Medical Center declined to comment for this story.Johnette Gindling, the executive director of the Space Coast Health Foundation, said that the best way for Florida lawmakers to lower the cost of uncompensated care and help its hospitals is through Medicaid expansion, which would provide health coverage to Floridians who earn up to $16,106 per year.“It is disappointing that Florida has not reached an agreement with the federal government in regards to the expansion of healthcare dollars for the uninsured,” Gindling said. “The federal government had previously given Florida an extension on the Low Income Pool funds in order to give our state an opportunity to create a new plan.”Controversy in TallahasseeThough the Florida Senate has passed a Medicaid expansion plan and has voted to accept full federal funding for the expansion in the next budget year, the Florida House has rejected that proposition.Members of the House majority who voted against Medicaid expansion, including House Speaker Steve Crisafulli, R-Merritt Island, have said that Medicaid expansion would cost the state too much money in the long term, even though the initiative would be completely federally funded in its pilot year. The federal reimbursement rate for Medicaid expansion would start at 100 percent, gradually taper off to 95 percent and eventually fall to 90 percent.Controversy over Medicaid expansion in Tallahassee is stalling the passage of a state budget and increasing the odds that the Florida Legislature will miss its May 1 deadline for budget passage.Meanwhile, Florida Gov. Rick Scott is launching a lawsuit against the Obama administration, arguing that the administration’s decision to cut off federal funds for Florida’s Low Income Pool is a coercive tactic to promote Medicaid expansion.In a statement released April 16, Scott said he viewed a recent letter from the Obama administration, which said that the future of LIP was “linked” to Medicaid expansion, as a tacit threat that the state would be punished for inaction on Medicaid expansion.In the meantime, Senate President Andy Gardiner, R-Orlando, whose district includes North Brevard, has been lobbying for Medicaid expansion and has urged his colleagues to negotiate with the Obama administration. In an a recent press release, Gardiner said that if LIP funding was eliminated without being replaced, the results would be catastrophic for the state’s health care sector, citing a study released by state health officials earlier this year.“Many hospitals will be unable to sustain a cut this large,” he said. “If LIP funding is eliminated or substantially reduced, we should expect layoffs and less services. The programs most at risk are those with high costs and low margins. Cancer centers, dialysis units, transplant services, graduate medical education capacity, and other special services will be limited or may even close their doors as hospitals struggle to cover the high emergency room costs of uninsured Floridians who could qualify for expanded coverage.”Debate over merit of LIP lawsuitLeah Barber-Heinz, CEO of the Florida CHAIN consumer health advocacy group, said that Governor Scott’s lawsuit was a “distraction from what needs to be done during a time of crisis.”“Since the passage of the Affordable Care Act, we have known that our Low Income Pool (LIP) funding would be significantly reduced by 2014,” she said. “The intention has always been that this ‘quick fix’ funding, which helps cover the cost of uncompensated care, would be reduced in states across the country.”Randall Holcombe, an economist at Florida State University and senior fellow with The James Madison Institute, disagreed. He said, “Medicaid made up less than 10 percent of Florida’s state budget in 1990 and now is more than 30 percent. It seems very reasonable for Florida’s political leadership to balk at expanding the program further, and unreasonable for the federal government to say that if we don’t, they will cut the money they now give us for health care. The federal government passed the Affordable Care Act. They should not be asking the states to administer it and pay for it.”Contact Kowarski at 321-242-3640 or Follow her on Twitter @IlanaKowarski.