The odds on close to $1 billion in extra Medicaid money which Florida officials have been banking on for months have gone from looking like a sure thing to what one observer said Tuesday was “50-50 at best.”
The political betting line on the cash turned when the U.S. House last week dropped from a wide-ranging jobs bill the proposed $25.5 billion, six-month extension of the enhanced Federal Medicaid Assistance Percentages (FMAP). Florida, like most states, has been pushing Congress to approve the extension for months, only to have it run into a rising tide of lawmakers increasingly wary of deepening federal deficit spending as elections loom.
U.S. Senate leadership now is considering tacking the extension onto the same jobs bill coming out of the House, when it returns from recess next week. But doubts are growing.
“I think the chances of getting this money have greatly diminished,” said Sen. Don Gaetz, R-Niceville, chairman of the state Senate’s Health Regulation Committee. “We were fortunate we did not build our budget around it. But not getting the extension is going to be felt in several areas of the budget.”
The Legislature tucked $230 million of anticipated FMAP money into the state’s now-$70.2 billion budget, earmarking the remaining $730 million that would come to Florida for reserves. By setting-aside the extra cash, Florida’s budget cushion would swell to $2.1 billion heading into next budget year, when a $6 billion spending shortfall is forecast.
According to the National Conference of State Legislatures, Florida is among 30 states which budgeted for 2010-11 with FMAP money in mind – but among only nine states that included contingency plans if the cash doesn’t flow. Losing the money may force many into special sessions in coming months while – for now – it certainly increases back-home pressure on Congress to act.
“It’s not an issue that it’s not needed,” said Rachel Morgan, an analyst with NCSL. “But Congress is concerned about how you do it and how you pay for it.”
Sterling Ivey, a spokesman for Gov. Charlie Crist, said Tuesday that the governor still expects the FMAP extension to be approved. The stance departs little from the one he and lawmakers have effectively held since January, when the governor included FMAP cash in his budget recommendation to the Legislature.
Crist also was among 47 governors in February who wrote congressional leaders urging they approve the measure.
“But it’s always been tentative at best,” Morgan cautioned about the FMAP extension. “And it was seen as having a better chance of making it through the House than Senate, until the House took it out last week.”
Florida structured its fall-back approach so that the FMAP money would enhance program spending or reduce planned cuts. But by using the federal money to free other revenue, Florida lawmakers also spread FMAP’s impact throughout the budget.
If FMAP arrived, $20 million more was slated to go to a state jobs and tax-break bill for businesses, $25 million more for the state’s Bright Futures scholarships, and $40 million for Everglades restoration, a fourfold increase in what lawmakers actually set aside for the environmental clean-up program.
Miami’s Jackson Memorial Hospital would lose $50 million lawmakers planned to steer to the financially troubled facility, and hospitals across the state would be forced to absorb a $300 million loss – a 7 percent rate reduction in Medicaid payments that would be eased to a 5 percent cut if FMAP was approved.
“I wouldn’t say the chances are bleak,” said Tony Carvalho, president of the Safety Net Hospital Alliance of Florida. “But every day you get closer to the elections, it gets tougher for Congress to approve this kind of spending. It’s 50-50 at best, now.”
Brian Gulley, a spokesman for U.S. Sen. Bill Nelson, said his office has heard mostly from hospital officials urging FMAP’s passage. But health and human services advocates said Tuesday they are looking to step-up pressure on senators when they return next week.
“It’s critical we get this money,” said Karen Woodall, who lobbies for low-income Floridians before the Legislature. “We’ve been trying to show that it’s a real economic development tool for the state, a legitimate part of the jobs bill. But if we don’t get it, it’d be devastating.”
By John Kennedy
The News Service of Florida
