The Obama administration and the state have reached an agreement in principle to continue funding Florida's hospital low-income pool for two more years but at a much lower cost, officials said Tuesday.
Florida will receive $1 billion this year, about half of what the state has been receiving, and $600 million for 2016-2017. The federal government must still wait until the end of a public review to issue its final ruling. The fight over the funds tore apart Florida's regular legislative session in late April and prompted Gov. Rick Scott to sue the federal government.
The Obama administration, hospitals and the state Senate wanted to expand Medicaid to roughly 800,000 Floridians to give them insurance directly instead of paying hospitals that care for the uninsured retroactively. But Scott and House Republicans are opposed to taking money tied to so-called Obamacare. Instead, the state will use $400 million from general revenue to funnel money to the hospitals by increasing Medicaid provider rates.
Scott's lawsuit accuses the Obama administration of withholding the hospital funds because the state won't expand Medicaid. In recent court documents, Scott showed no signs of withdrawing the lawsuit despite Tuesday's announcement, noting the underlying disagreement between Florida and the Obama administration remains. That comes even though federal health officials have repeatedly said their decision about the funds is not tied to whether or not Florida expands Medicaid.
Lawmakers in eight others states that also receive the hospital funds are watching the standoff closely as the Obama administration has said they will use the same guidelines in Florida to make their decision in those states.
The Republican governor credited his lawsuit with helping to extend the funds for two more years. He also used the opportunity to criticize hospitals relying on the funds. Scott, who once ran a private, for-profit health care company, in recent months has become increasingly adversarial toward hospitals that receive tax dollars. He has tried to convince lawmakers the hospitals are not as bad off financially as they maintain. Some hospitals have said they would be forced to shut down or cut services without the funds. The governor convened a hospital commission to examine hospital finances, including CEO salaries and bonuses and lobbying expenses.
"The agreement in principle provided by the Obama Administration today makes it clear that our state must begin quickly working to reduce the costs of hospitals, many of which are making record profits, so they are not relying on this federal funding in the years ahead," Scott said in a written statement.