Florida Legislature Begins Special Session to Resolve Budget Impasse

Today the Florida Legislature begins a special session that will hopefully resolve the budget impasse that has the state a month away from a government shutdown.

By Frank Alcock June 1, 2015

Florida state capital m7xyol

Today the Florida Legislature begins a three-week-long special session that will hopefully resolve the budget impasse that has the state a month away from a state government shutdown. How will it end?

I see two likely outcomes. First, I think the legislature will get a budget passed this month and avoid a shutdown.  Second, I think that the Florida Senate will ultimately concede this year’s battle over Medicaid to the Florida House and Governor.  This will leave unresolved the issue of 800,000 uninsured Floridians that are too poor to access health insurance through the AHCA exchanges, but not poor enough to qualify for Medicaid under existing Florida guidelines.

If the state government were to shut down for a week or more, it would be far more noticeable and unpleasant than recent federal government shutdowns. Republicans would also have nobody to blame but themselves, since they control both legislative chambers as well as the Governor’s Mansion. Given the adamant posture taken by House Speaker Steve Cristafulli and Governor Rick Scott through the regular session – that is, no Medicaid expansion – it seems unlikely that they’ll back down this month.  Contrast this with the softening posture of Senate president Andy Gardiner, and the possibility of temporarily finding some extra money to offset $1 billion in reductions from federal Low Income Pool (LIP) contributions, and it would appear that Gardiner is the one more likely to blink.

For Gov. Scott and the House leadership, fixing the gap problem is not as important as shrinking government and avoiding future fiscal commitments. Although the leveraging capacity of the additional commitment is immense ($9 in federal funding for every $1 Florida spends – and economic multipliers thereafter), Medicaid expansion still counts as a significant new state budget commitment that expands government. And that’s an anathema to conservative economic principles. Opponents of Medicaid expansion in Florida view the high number of Floridians without health insurance as the lesser of two evils. They would prefer to focus on cost reduction through enhanced competition and job growth to reduce the ranks of the uninsured. Most acknowledge and/or understand that large numbers of uninsured will continue to exist, but they apparently prefer that reality to the symbolism of expanding government.

The Florida Senate is at odds with the House on this issue. They see the 800,000 Floridians without health insurance as a more pressing priority than rigid fealty to conservative principles and have put forth a plan to create a heavily subsidized market exchange “with conservative guardrails” called FHIX. Under the Senate plan, if the federal government fails to honor its 90 percent funding commitment, the state would not be required to maintain the program by picking up more than 10 percent of the tab. It’s a serious attempt to address the gap problem while honoring fiscal commitment concerns. But the plan has already been condemned by Gov. Scott, and I’d be surprised if he turned around and embraced it.

I just don’t see a budget agreement that expands Medicaid happening this month. Florida hospitals will not be pleased with the state’s failure to do so but the federal government’s offer to extend a reduced amount of LIP matching funds for another two years will ease some of the financial pinch in the short term. For those 800,000 uninsured Floridians, relief will likely remain elusive, at least for another couple of years. If they want health insurance they’ll have to heed the Governor’s admonition to find a better job.

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