Florida Low Income Pool and Medicaid Expansion

The Medicaid Low Income Pool (LIP) is very much an “inside baseball” topic limited to a small universe of health care providers, budget gurus, and policy wonks. But the program is now undergoing major transformation, which impacts all of us, especially victims of Florida’s Medicaid coverage gap.

Governor Scott and the Republican-controlled Florida Legislature remain steadfastly opposed to extending Medicaid coverage to Floridians living below poverty ($990 per month for an individual). As a result of extremely harsh politics, over half a million Floridians remain uninsured. This includes parents struggling to stay healthy so they can take care of their children and other workers taking care of all of us — through child care, home health, construction, landscaping, cleaning, food services, and other similar jobs that don’t offer health insurance.

So how does LIP fit into this picture? The program began in 2006 as part of a Medicaid demonstration project. Its purpose was to provide a temporary cushion of extra funding for safety net hospitals as Medicaid recipients moved from state-run Medicaid to managed care plans.

Now, 10 years later, that “temporary cushion” has been drastically reduced — almost a 75 percent cut for this fiscal year and slated to end next summer. At the same time, safety net providers are struggling to implement new restrictions on the use of LIP funding and ensure sufficient local resources to support charity care programs.

 One of the new restrictions is that LIP funds can no longer be used to fund charity care provided by safety net hospitals for Floridians caught in the coverage gap. Federal health officials rightfully question why they should we pay for LIP when $7 million per day has already been set aside for Florida under the Affordable Care Act ($51 billion over 10 years) to provide health insurance coverage for this same population? Coverage is a far superior way to secure cost-effective access to health care for low income individuals and families. 

There has been lots of recent buzz on how the transformation and the impending phase-out of LIP will impact the state, counties, hospitals, and health care providers. Florida hospitals already incur $2.8 billion annually for uncompensated care. The end of LIP funds will only increase that burden.

But what does this LIP transformation actually mean for consumers “on the ground?”  While not coverage, hospital charity care programs have provided short term emergency relief to vulnerable Floridians suffering from chronic and catastrophic illnesses, such as cancer and stroke, who would otherwise face crushing medical bills. Notably, medical debt is already the largest cause of U.S. bankruptcies.

With LIP transformation, will victims of the coverage gap be turned away from hospital care due to reduced indigent care funding? Will more people be forced to seek care through costly emergency room visits? How much will this add to the already shockingly high hospital uncompensated care burden and additional costs for the insured? As it stands, the Florida Chamber of Commerce estimates that insured Floridians pay $1.4 billion annually in “hidden taxes” to cover the costs of the uninsured. What’s worse, based on results of a study reports in the New England Journal of Medicine, it is estimated that 5,600 uninsured Floridians die prematurely due to the coverage gap. Will this heartbreaking statistic continue to creep up?

No doubt, Florida leaders and leaders in the other 18 states which have not expanded their Medicaid programs will eventually get on the right side of history — but in the meantime our fellow Americans are unnecessarily and tragically dying.