George Gibbs Center for Economic Prosperity

Sa⁠i⁠n⁠t⁠ Augus⁠t⁠⁠i⁠ne Record — House, Sena⁠t⁠e heal⁠t⁠h care fund⁠i⁠ng d⁠i⁠sagreemen⁠t⁠ shapes budge⁠t⁠ ⁠t⁠alks

By: The James Madison Institute / 2015

Saint Augustine Record”House, Senate health care funding disagreement shapes budget talks”March 15, 2015By Tia Mitchell, Florida Times-UnionTALLAHASSEE — A disagreement between the Florida House and Senate over health care funding and Medicaid expansion could foreshadow a budget showdown that leaves hospitals and health clinics vulnerable.The Senate is including in its budget a plan to use federal Medicaid expansion dollars to provide health coverage to roughly 1 million poor Floridians. The conservative House has blocked similar proposals for the past two years.However, the House does hope to include about $2 billion in its budget to continue the Low-Income Pool, or LIP, a separate Medicaid program that is set to expire in June. State and federal officials are in discussion about how to keep LIP money flowing for another year or longer, but nothing has been agreed upon.UF Health Jacksonville, a hospital perpetually on shaky financial ground, receives nearly $95 million from the program each year in addition to $26 million directly from the city budget that would also be in jeopardy if LIP goes away because of the lost incentive of a federal match. It and other safety net hospitals around the state are main beneficiaries of the program.The Florida Senate has said the uncertainty around LIP makes it even more important to fight for Medicaid expansion and the roughly $50 billion in federal dollars that would come with it over the next decade.“These are Florida dollars; they don’t come out of the ground in Washington, D.C., they come out of our pockets in the state of Florida and we deserve to have them back here,” Sen. Bill Galvano, R-Bradenton, said Tuesday when the Health Policy Committee unanimously approved the Medicaid expansion plan. “And I assure you and I assure the Florida House that this will be the cornerstone of our ’15-’16 budget.”While the business and health care industries are in support of the Senate’s health care proposal, conservative organizations like Americans for Prosperity and the James Madison Institute are opposed. These groups have singled out the simultaneous debate about LIP as reason why the federal government can’t be trusted to keep its long-term promise to shoulder the majority of the costs of Medicaid expansion.The U.S. Department of Health and Human Services has said that LIP cannot continue in its current form, causing some conservative to interpret it is a veiled threat that the program would be allowed to expire and leave safety net hospitals that depend on the money in a lurch.“Our concern is anytime you take $50 billion from the federal government, you’re asking for trouble and we see that illustratively with the LIP funding,” JMI President and chief executive Bob McClure said during the committee meeting.Because of time constraints, the public comment period was abbreviated and McClure wasn’t able to read his entire prepared remarks. That statement gives even more insight to the connections he makes between the LIP extension and Medicaid expansion debates.“We stand firm on the concern that if the federal government will play political games with LIP funding, then how are we to believe it won’t happen down the road with any dollars taken for a Medicaid expansion?” the statement said. “Medicaid is already the Pac-Man of the state budget. If we increase the program, where will we be when our state’s taxpayers are responsible for a now larger bill?”Hospitals say the discussion about how to reform LIP has been years in the making and is something the federal government has been clear about even as it continued to make good on the promises it made under the existing agreement. They also say it is a conversation that should be kept separate from talks about Medicaid expansion, since the programs serve different purposes.“Some people who benefit from the health care services made possible by the LIP supplemental funding program would benefit from the ACA coverage expansion, but it is not a ‘one or the other’ situation,” Tony Carvalho, president of the Safety Net Hospital Alliance of Florida, said earlier this year. “Florida needs both programs.”Medicaid expansion is intended to help low-income resident obtain insurance coverage and the preventative and primary care that comes with it. The Senate proposal is expected to help about 800,000 Floridians gain coverage. The federal government would pay 100 percent of the costs in the first year with its share tapering down to a 90-percent minimum in perpetuity.Meanwhile, the LIP program helps hospitals stay afloat as they continue to care for those who don’t have insurance; even if the state were to expand Medicaid there would still be an estimated 2 million uninsured Floridians. That would translate to $1.1 billion to $1.3 billion in uncompensated care each year, mostly in hospital emergency rooms, according to state economists.Justin Senior, deputy secretary for Medicaid at the state Agency for Health Care Administration, said Tallahassee has been in communication with Washington about what the next form of LIP should look like.California has a similar program for uncompensated care that reaps more federal funding than Florida even after the state expanded Medicaid. Texas is among the conservative states that has refused Medicaid expansion, but it also gets more federal dollars than Florida to assist with uncompensated care.The feds are aware of Florida’s short timeline: a balanced budget must be approved before the session concludes on May 1. The hope is for the state and the U.S. Department of Health and Human Services to reach a preliminary agreement by mid-April.If the Senate’s budget ultimately includes LIP and Medicaid expansion funding, it could approve funding that is several billion dollars higher than the House budget. That would make the annual process of matching up the Senate and House budgets for final approval much more difficult and increase the likelihood that session could be extended, or there could be a special session to complete the budget.The House’s top leaders, including Speaker Steve Crisafulli and budget chief Richard Corcoran, have both said there is no appetite for considering the Senate’s Medicaid expansion plan. But they insist it is too early in the session to draw firm lines and measure their words carefully.“We’re going to take a look at that measure just like any other measure that the Senate proposes, but I can tell you I have absolutely no desire to expand Medicaid,” said Rep. Matt Hudson, R-Naples, the House’s health care budget chief. “So there are other bills that will certainly come across my desk first.”The tone from the Senate, where Republicans and Democrats are supporting Medicaid expansion with the assumed if not overt support of Gov. Rick Scott, is that they are unwilling to let House Republicans block movement for a third year in a row.Sen. Don Gaetz, who recently ended a two-year term as president, said the health care proposal will be a difficult bill to pass but he believes it is the right thing to do under current circumstances locally and nationally. Before the committee vote Tuesday, he criticized interest groups who would support continuing the LIP program while opposing Medicaid expansion.“I’m concerned by those who say let’s worry about our LIP funding, argue for our LIP funding, include our LIP funding when it doesn’t even exist, put it in the budget, spend it as if it’s there, but at the same time they say we can’t take the federal money under this bill,” Gaetz, R-Niceville, said. “That’s practicing the doctrine of selective indignation; it’s intellectually dishonest.”Asked later whether he was calling out House Republicans, Gaetz said he wasn’t talking about the full House or any individual members. But he said anyone who holds the position of wanting LIP money but not Medicaid expansion would fit the bill.SENATE MEDICAID EXPANSION PLAN¦ Formally called the “Florida Health Insurance Affordability Exchange Program” or FHIX, Senate Bill 7044¦ Provides health insurance for roughly 800,000 Floridians making 138 percent of the federal poverty level ($33,465 for a family of four) or less¦ For the first six months, enrollees would become members of the state’s existing Medicaid managed care program that requires them to select a privatized plan similar to an HMO¦ Phase Two begins Jan. 1, 2016, when participants would start using the state’s fledging health exchange, Florida Health Choices, to select from various private insurance options.¦ Enrollees would have to show proof that they are working, looking for a job or receiving job skills training unless they are disabled or a caregiver.¦ Participants would be required to pay a monthly premium between $3 and $25, depending on income.¦ Enrollees will also receive health savings or health reimbursement accounts to help pay for out-of-pocket costs.¦ Phase Two requires approval from the federal government. Of the five states approved to implement Medicaid expansion alternatives, no work requirements or premiums for the individuals who make less than 100 percent of the federal poverty level have been allowed.Article: