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Rep. Castor highlights 'irony' of Medicaid cash grab months after rejection of expansion dollars


This issue has received scant attention, likely because Florida's Republican leaders would rather not talk much about their decision to ask the federal government for more Medicaid dollars even as they rejected Medicaid expansion.

But U.S. Rep. Kathy Castor, D-Tampa, brought up the state's cash grab in a letter to House Speaker Will Weatherford and Senate President Don Gaetz today where she implores them to support Medicaid expansion.

Florida is waiting to hear back from the federal government on its request to expand a pool of money funded by state, local and federal Medicaid dollars to provide health services to the poor and uninsured. The $1 billion "Low Income Pool" (LIP) program would be combined with other Medicaid funding streams and be renamed the "System Access and Transformation Incentive Fund."

The state plan calls for that new fund to be increased to roughly $4.5 billion annually, or $45 billion over 10 years. Remember, Flroida rejected $51 billion over 10 years in Medicaid expansion funding tied to President Barack Obama's federal reforms.

"This is ironic to say the least," Castor wrote. "It is ironic because the LIP was established to ensure continued government support for the provision of health care services to Medicaid, underinsured and uninsured populations.  So on one hand, the State is blocking Medicaid funds, but on the other, the State has its hand out for billions of dollars of Medicaid funds."

Castor says she expects the U.S. Department of Health and Human Services to be skeptical of the state's request, which is part of a bigger application to renew the Medicaid managed care program. So far, the state has received requests from the feds for more information or documentation, but not official word whether the plan submitted in November has been approved or rejected.

That is creating a bit of concern for lawmakers who need to know if managed care will continue and if there will be more Medicaid funding coming to Florida as they craft the 2014-2015 budget.

House Republicans, who blocked the plan to use the federal Medicaid expansion dollars to purchase health insurance for poor Floridians, are also denying that there is hypocrisy in the decision to reject some Medicaid dollars while remaining silent as the state turns around months later and asks for more.

"The concept of looking at a LIP pool predates the Affordable Care Act and predates the contemplation of Medicaid expansion, so the two are not tied together in that relationship," said Rep. Matt Hudson, a Naples Republican who is the House's health care budget chief.

At the time they rejected the Medicaid expansion alternative, Weatherford and other House leaders argued that federal funding is unreliable in the long term and could become a drag on the state budget. Gaetz has also criticized the federal government's "all or nothing" rules regarding Medicaid expansion funding, even though the Senate as a whole voted to accept the funding.

Supporting the transition of LIP into a $4.5 billion a year program doesn't contradict his opposition to Medicaid expansion, Hudson said.

"The two are entirely different," he said.

Here is Castor's full letter:

Dear President Gaetz and Speaker Weatherford:

Thank you for the opportunity to provide an update on the importance of the expansion of health services under Medicaid in Florida.  I strongly recommend that you move forward on a bipartisan proposal for Medicaid expansion during the upcoming Florida Legislative session.  It would be fiscally irresponsible not to draw down the $50 billion due back to Florida and leave almost one million Floridians without an option for medical care.

First, these are Florida tax dollars that need to be returned and put to work for our state.  The funds are similar to transportation, housing and education dollars that are brought back to Florida to benefit our citizens every year.  If you do not act, over $1.2 billion will be lost during the State’s 2013-2014 fiscal year and billions more will be left on the table in future years.  Estimates using the data from the Florida Social Services Estimating Conference show the amount of money Florida is losing each day to be $7 Million per day since January 1 as a result of blocking Medicaid expansion.  That number will increase each year.

Second, Florida businesses and hospitals will suffer an extraordinary hit to their bottom lines unless you put our Medicaid tax dollars to work.  You will leave hospitals across Florida no choice but to pass along the costs of charity care to businesses and individuals that have insurance.  This hurts everyone and leaves our local hospitals in the lurch.  A coordinated effort would instead employ the Medicaid dollars to move patients into community primary care clinics and doctors’ offices.  (In fact, HHS just announced that they would fine Florida for a new policy that attempts to cap ER hospital visits because the Florida policy is in contravention with federal law.)  I urge you not to unnecessarily burden our businesses and local hospitals, which are the economic center of many communities.

Third, not only will businesses and hospitals suffer without expansion, but the State’s desire to draw down monies under the Low Income Poll (LIP) pool per the Medicaid waiver is imperiled by the State’s intransigence. As you are aware, the State of Florida recently requested $4.5 Billion from the U.S. Department of Health and Human Services for Medicaid funds paid to providers from Florida’s LIP.  This is ironic to say the least.  It is ironic because the LIP was established to ensure continued government support for the provision of health care services to Medicaid, underinsured and uninsured populations.  So on one hand, the State is blocking Medicaid funds, but on the other, the State has its hand out for billions of dollars of Medicaid funds.  I anticipate that HHS will be very skeptical of this approach.

You may recall that I worked diligently with Florida’s congressional delegation in 2011 to achieve an approval by HHS of the Florida Medicaid Section 1115 Research and Demonstration Waiver. We celebrated the $3 billion for Medicaid funds coming to Florida that would help hospitals and providers providehealth care to our neighbors. Now, Florida’s request for an extension and increase in Medicaid LIP funds will undergo great scrutiny and skepticism due to the incongruity of Florida’s Medicaid policy. Meanwhile, HHS has been enormously flexible with Florida and the Legislature per the new Medicaid privatization plan.  Florida received a Medicaid waiver last year from HHS to change Medicaid into a managed care program.  Nevertheless, Florida has put itself in a difficult position to seek more Medicaid dollars and additional flexibility due to its unwillingness to simply bring its own tax dollars back to the state to help our citizens.

Finally, we not only have a fiscal, but a moral obligation to ensure our neighbors have access to health services.  As you know, Florida has the second highest uninsured rates in the entire country at just under 25 percent.  If Florida expands Medicaid, 68 percent of uninsured Floridians would have a path to coverage.  What do you say to the woman or man or parent who falls into that coverage gap?  They do not have the option to pay only $50 for an individual plan like Florida Legislators currently do.

Expanding Medicaid is critical to ensure Florida families have access to quality health care and Florida businesses are not unfairly penalized.  We must keep Florida taxpayer dollars here where they can best serve the health needs of our neighbors and ensure the continued growth of our local economies.  As the leaders of the Florida Legislature, I urge you to not miss this opportunity for our great State.   Thank you.


 Kathy Castor

U.S. Representative

Florida – District 14