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Attempt to force Obamacare expansion on states backfires

By   /   May 11, 2015  /   News  /   No Comments

Photo credit: State of Florida

FLIPPED: Florida Gov. Rick Scott had surrendered to calls for Obamacare’s Medicaid expansion, until the feds cut funding for a state Medicaid waiver program

By Jason Hart | Watchdog.org

Trying to force Obamacare expansion onto Florida by cutting funding for an existing Medicaid program has backfired on President Obama.

Florida Gov. Rick Scott, a Republican, is suing Obama’s Department of Health and Human Services over plans to stop funding the state’s Low Income Pool program, which compensates hospitals for seeing uninsured patients.

Almost immediately, Republican Texas Gov. Greg Abbott and Republican Kansas Gov. Sam Brownback announced they would join the suit against HHS.

Christie Herrera, senior fellow at Florida’s free-market Foundation for Government Accountability, told Watchdog.org the Obama administration has “awakened a sleeping giant.”

“They’ve raised the ire of all these other states that are in Florida’s exact position, and that’s why you’ve seen Kansas and Texas filing amicus briefs in the lawsuit,” Herrera said during a phone interview.

FGA and other critics of Obamacare expansion have warned states not to trust promises of new federal funding — a point the Obama administration is inadvertently driving home.

Florida’s LIP, like other Medicaid waiver programs, must be periodically reauthorized by the federal government. The waiver system keeps states on a short leash and makes any meaningful state control temporary.

Kansas, Texas and Tennessee will be at the mercy of HHS for the renewal of similar programs for the uninsured and have not expanded Medicaid under Obamacare.

Where Obamacare expansion is concerned, “the federal government needs Florida more than Florida needs the federal government,” Herrera said.

“HHS has been trying so hard to land the big fish of Medicaid expansion like Florida and Texas, the last thing they need to do is make those states mad and join them together against Obamacare,” she explained. “That’s exactly what they’ve done, and that’s why their plan has backfired.”

In 2012, the U.S. Supreme Court decided the feds could not coerce states into the Obamacare expansion by threatening to cut off existing Medicaid funding. Scott seeks to build on that ruling.

Scott campaigned against Obamacare expansion in 2010 and remained a vocal critic after taking office, but he embraced the expansion early in 2013 before changing positions again this spring.

“Sometimes you need a reminder that the federal government is not the most trustworthy partner,” Herrera told Watchdog.org. “Governor Scott needed that reminder, and that’s what he got.”

The LIP program, a product of Florida’s 2005 Medicaid reforms, costs far less than Obamacare’s expansion of Medicaid to able-bodied, working-age childless adults would.

In 2012, the left-leaning Urban Institute projected Obamacare expansion in Florida would cost taxpayers $82 billion over 10 years. The LIP program costs roughly $2 billion per year.

The Florida Senate’s “Florida Health Insurance Affordability Exchange” Obamacare expansion plan is opposed by the Florida House but supported by Florida Hospital Association-backed campaign A Healthy Florida Works.

The hospital association and Florida Chamber of Commerce see the promise of billions per year in Obamacare money as a way to create jobs and improve workers’ health. The same arguments have been made in other states, where expansion costs are already blasting past projections.

Jennifer Fennell, a spokeswoman for A Healthy Florida Works, explained the group’s position in an email to Watchdog.org.

“From a business perspective, it makes more sense to pay less on the front end for preventative care and management of chronic conditions than paying much more for emergency room visits and hospital stays on the back end,” Fennell said.

This is another argument used successfully in other states, but emergency room utilization has increased as Obamacare expansion has added millions of Americans to the Medicaid rolls in the past 16 months.

“The Florida Senate took a bipartisan approach to finding a solution for both LIP funding and extending coverage,” Fennell added. “It is possible to look past the politics and the rhetoric just as the Florida Senate has and do what is best for the people of the state of Florida.”

The Florida Senate’s Obamacare expansion plan “is not an expansion of traditional Medicaid,” she said.

Fennell noted the plan includes premiums, job training and education requirements for enrollees — but these provisions would require federal waivers, just like the LIP program that’s being defunded by the Obama administration.

Herrera predicted by the end of June state lawmakers “will come to an agreement on the budget without LIP funding, and then the federal government will have lost its biggest bargaining chip for Obamacare.”

“I think people are starting to see that it’s not the little guy pushing Obamacare in Florida. It’s big hospitals, big business, big insurance companies,” she concluded, pointing to a SaintPetersBlog story about state senators’ ties to the health-care industry.

The Obama administration had hoped states resisting Medicaid expansion would fall like dominoes. But, combined with nationwide spending and emergency room data, threats to existing Medicaid waivers are solidifying Obamacare opposition.

[Editor’s note: A Healthy Florida Works was incorrectly identified as a Florida Chamber of Commerce campaign in the initial version of the story, which has been corrected to note the Florida Hospital Association is the key backer of A Healthy Florida Works.]

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Jason was formerly a reporter for Watchdog.org