Rick Scott warns Barack Obama that he won’t use state dollars to “backfill” LIP loss

Gov. Rick Scott sent a letter to President Barack Obama Wednesday advising Obama that he will not use state dollars to “backfill” any loss of federal “low income pool” or LIP money used to both help pay for health care programs and to train doctors.

Scott assumed the funding would be intact when he crafted his proposed budget for the 2015-16 fiscal year, despite being told last year by the Centers for Medicare and Medicaid Services that the program would expire June 30, 2015.

“Should your administration decline to accept a new LIP model and therefore terminate this program, I will not support using any state funds to backfill this federal program,” Scott wrote in his letter. “Florida taxpayers fund our federal government and deserve to get a return on their investment. Moreover, we have worked hard to turn Florida’s economy around and cannot afford to fund programs started by the federal government.”

The news sent shock waves across the health care community. Noted one lobbyist: “This is the thing we feared would happen.”

LIP is a $2 billion program made up of federal funding as well as “intergovernmental transfers” from counties and taxing districts. It is made possible by a waiver the state secured to implement a mandatory Medicaid managed care program. The state was told in correspondence on April 11. 2014 that LIP would be extended through June 30, 2015, to provide stability to providers as the state transitioned to a mandatory managed care environment.

House Health Care Appropriations Subcommittee Chairman Rep. Matt Hudson  of Naples would not comment Tuesday whether the House would use state money to plug a hole if LIP were not extended. “It’s a little premature to talk about it until we know what we are dealing with,” Hudson said.

Senate Appropriations Subcommittee on Health and Human Services Chairman Sen. Rene Garcia of Hialeah said his committee is working on several different budget scenarios.

In his letter, Scott wrote that Florida’s request to continue the Low Income Pool is not associated with Medicaid expansion under the federal health reform. He notes that California has expanded Medicaid and still receives more than $5 billion in Medicaid supplemental funding. Texas, by contrast, has not expanded Medicaid and it receives nearly $7.5 billion annually in Medicaid supplemental funding.

Florida has opposed implementation of the federal health care law. It did not set up a state exchange for residents to purchase Obamacare plans and it has not expanded Medicaid to peoples with incomes at or below 138 percent of the federal poverty level. House Speaker Steve Crisafulli opposes expanding Medicaid. Senate President Andy Gardiner is more supportive of expansion.