Obama Administration Might Contribute $1 Billion in LIP Funds, Helping to Ease Budget Standoff

The Low Income Pool is a unique, complicated agreement between the federal and state government of Florida in which the feds provide money to hospitals who treat people who are uninsured or underinsured. The deal was struck when Jeb Bush was governor and George W. Bush was president, but President Obama wanted it eliminated under his healthcare reform. Obama proposed replacing it by expanding Medicaid to help cover the health needs of the poor. Gov. Rick Scott and many Republicans in the legislature are ideologically opposed to that idea, though, and have stopped funding for Medicaid expansion while still depending on those LIP funds. 

The feds, however, have warned Florida for a long time now that those LIP funds will not be renewed this June. Disagreements over how to handle this shortfall basically lead to an early collapse of the normal legislative session. Both houses, though, are supposed to meet in a special session next month to hash out a budget (and thus this issue). 

However, it seems that the Obama administration is ready to budge a little bit. They've indicated that they would supply $1 billion more in LIP funds over the next year. The catch: That's about half of what they previously sent. The year after that, the feds will only supply $600 million. The plan hasn't been officially announced, but by all intents and purposes it seems to be a done deal. 

“I believe the clear indication before the Special Session is Florida will receive a significant level of LIP funds, which will help us in our efforts to finish the budget by the July 1 deadline,” said House Speaker Steve Crisafulli according to Politifix Florida. 

Scott has previously sued the feds for linking continued LIP funding to ensure that the state expands Medicaid coverage. This despite the fact the feds are not required to upkeep the LIP agreement. 

This whole argument has basically been an ideological pissing match between left and right, but the results do have real effects. Some state hospitals have been clamoring for Medicaid expansion instead of continued reliance on the LIP.

Unsurprisingly, Jackson Memorial Hospital is the biggest recipient of LIP funds in the state in exchange for caring for the uninsured. It stands to lose tens of millions in funding if the state continues to rely on slowly depleting LIP funds instead of Medicare expansion. 

In any event, the tentative new deal will hopefully ensure that the legislature passes a state budget by the end of June, thus avoiding a possible state government shutdown.