Florida's Republican Governor Rick Scott plans to sue the Obama administration over Obamacare, Medicaid, and a special pool of federal money the state receives to pay providers who perform uncompensated care. It's all part of the ongoing debate over whether the state will expand Medicaid under Obamacare, and it ties into a fight between the state's House and Senate over Florida's next budget.
Some policy backstory: Since 2006, Florida has run a Low Income Pool, which funds hospitals and other health providers for uncompensated care, through a federally approved Medicaid waiver. It's a state program paid for with about $2 billion federal funds—similar to the Medicaid bonus funding that Mitt Romney used to help finance RomneyCare in Massachusetts.
But Florida's waiver is set to expire later this year. The Obama administration is threatening to cut off funding for the program when that happens—unless Florida agrees to expand Medicaid under Obamacare.
Scott says he's suing because the threat is illegally coercive, according to the Tampa Bay Tribune:
Scott blasted CMS on Thursday, saying that linking the two issues violated a U.S. Supreme Court ruling "that the president cannot force Medicaid expansion on states."
"Not only does President Obama's end to LIP funding in Florida violate the law by crossing the line into a coercion tactic for Obamacare, it also threatens poor families' access to the safety net health care services they need," Scott said.
He called the actions "outrageous and specifically what the Supreme Court warned against."
Scott is referring to a 2012 Supreme Court decision which ruled that the federal government could not threaten to rescind all federal Medicaid funding for states that chose not to expand Medicaid, as Obamacare originally allowed. To do so would have major budgetary consequences for states, where federal Medicaid funding often makes up 10 percent of more of a state's total budget. Threatening to pull that funding, Chief Justice John Roberts said, was effectively a "gun to the head" of state officials.
Scott's argument, basically, is that threatening to allow $2 billion in federal funding for the Low Income Pool to expire if the state does not expand Medicaid is also a gun to the head.
I'm not sure I completely buy Scott's legal argument. Yes, $2 billion is a lot of money for a state, but it's not even close to 10 percent of the state's $77 billion budget (it's more like 2.5 percent). And the LIP funding was already scheduled to end, at least in its current form, later this year anyway. It probably would have been renegotiated somehow, but it's not as if the administration is threatening to cut off funding it had already promised. It's just saying that it won't negotiate a renewal of that funding under certain conditions.
In addition, the Obama administration's Department of Medicare and Medicaid Services (CMS) argues that the funding streams are linked. A letter from CMS to the Florida governor's office posted by The Washington Examiner argued that participating in Obamacare's "Medicaid expansion would reduce uncompensated care in the state, and therefore have an impact on the LIP, which is why the state's expansion status is an important consideration in our approach regarding extending the LIP beyond June."
All this takes place against the backdrop of an ongoing state budget battle, in which the Senate wants to expand Medicaid under the health care law, and the House does not. Gov. Scott has gone back and forth on the issue: He vigorously opposed Obamacare during his first campaign, but then said he supported the Medicaid expansion, which under the law would be largely federally financed. But recently he's changed his mind, saying he doesn't believe that the federal government would be willing and able to continue to fund the expansion. Losing the LIP funding would leave the state with a budget gap of a little more than $1 billion.