The Obama Administration Is Trying to Force Florida into the Medicaid Expansion, So Florida’s Suing

The Obama administration, via the Centers for Medicare and Medicaid Services, has threatened to cut off a billion-dollar pool of funds that Florida gets every year from the federal government to pay hospitals to take care of poor patients, called the Low Income Pool, unless Florida agrees to expand Medicaid under Obamacare. (It’s the Florida legislature that’s solidly opposed to doing so; Governor Rick Scott has gone back and forth.) So Governor Scott announced today he’s suing the federal government over the issue, citing the fact that the Supreme Court struck down part of Obamacare back in 2012 because it involved coercing the states, which the federal government isn’t really allowed to do. 

From the governor’s announcement:

The President’s healthcare agency sent us a letter this week saying the ‘the future of LIP’ and ‘Medicaid expansion are linked.’ But, the Supreme Court has already ruled in NFIB v. Sebelius that the President cannot force Medicaid expansion on states. In fact, the Court ruled that the President could not use ‘gun to the head’ approaches in pushing for Medicaid expansion.

“Not only does President Obama’s end to LIP funding in Florida violate the law by crossing the line into a coercion tactic for Obamacare, it also threatens poor families’ access to the safety net healthcare services they need.

The idea, to be sympathetic to CMS, is that the Medicaid expansion obviates the need for programs like LIP, but it won’t, really, as Scott’s announcement points out. As Ramesh wrote yesterday, this looks a lot more like just a new strategy by President Obama to get states to sign onto Obamacare’s Medicaid expansion (the source of a lot of the law’s effect on the uninsured rate) before he leaves office in 18 months. The underlying idea CMS is citing is also appealing to the Obama administration: It papers over the fact that Obamacare leaves huge gaps in our health system that states, hospitals, etc. have to find a way to fill.

Scott’s comparison to the earlier Supreme Court is quite fair — there certainly seems to be some intentional coercion here — but the situation is not exactly the same. The struck-down portion of Obamacare threatened to completely wreck states’ health-care systems and budgets by withdrawing all federal Medicaid funding if they didn’t implement the expansion, while CMS is now just threatening to cut off a much smaller, discretionary piece of funding that has only existed since 2005 and varies widely across states. It seems quite possible what the Obama administration is trying to do now is legal by the standard that deemed the original Medicaid expansion illegal.