Acting right on the heels of the historic decision affirming the Affordable Care Act in King v. Burwell, Florida Governor Rick Scott withdrew his lawsuit against the Obama Administration on the state’s Low Income Pool.
That was a wise decision in my view, as the suit had no merit (in my purely non-legal opinion). But the Governor’s claim of victory left me scratching my head. Earlier this week the federal Centers for Medicare and Medicaid Services (CMS) issued a letter of agreement in principle with the state announcing LIP funding levels that were virtually the same as proposed to the state in a May 21st letter before the Florida Legislature’s special session started.
Quick history lesson – last year’s LIP was $2.1 billion, and when the state of Florida originally filed its waiver extension request in November 2013, the state asked that the LIP be doubled to $4.5 billion. This request showed enormous chutzpah since the Obama Administration has been quite clear for years now that the LIP in its current form would not continue.
Questions about the LIP have been floating around for many years dating all the way back to its original approval in 2006 when Jeb Bush was Governor and his brother was President. In 2008 the federal watchdog agency GAO questioned the assumptions behind the budget neutrality agreement saying “HHS approved a spending limit for the low-income pool based on potentially inflated historical spending.” (P. 61).
The agreement in principle announced earlier this week is largely in line with what I have been expecting for some time. CMS has no desire to pull funds out of the state’s safety net precipitously so cuts are being phased in. In SFY 15-16 total LIP spending is authorized at $1 billion (this includes both federal and state shares) a cut of just over 50%. In the second year of the agreement SFY16-17 the total spending limit for federal and state expenditures is $608 million. This 71 percent cut from Florida’s LIP allotment for this year is a far cry from the $4.5 billion the state originally requested.
On a final note, as a long time proponent of waiver transparency and a strong public comment process, I find it discouraging that all of this has basically been decided before the federal public comment process closes tomorrow. Technically, amendments to waivers are not subject to public process requirements – a deficiency in the law that I testified about earlier this week at a US Congressional panel. But to their credit, both the state and the federal governments did take comments on this LIP amendment – however the agreement was reached before comments had even been submitted underscoring the need for reform in this regard.
