House and Senate Far Apart on Budget as Health Care For Poor Becomes Bargaining Chip

House and Senate leaders continued to swap offers on the broad outlines of a budget Friday, but remained far apart on more than just the numbers, with divisions remaining on the conditions for negotiations and the mechanics of how to bridge the differences.

By the end of Friday, the House had made a significant concession to the Senate on hospital funding — but said it would only follow through if the upper chamber dropped insistence on using Medicaid expansion dollars to help lower-income Floridians purchase private insurance. The Senate essentially said the House offer was still inadequate, in part because two components of the health-care puzzle facing the Legislature are tied together.

With a week left in the legislative session, it is inevitable that lawmakers will have to return to the Capitol for either an extension of the current session or a special session in a few weeks. And despite the continuing offers, Senate leaders clearly did not expect in-depth negotiations to begin soon over the nuts and bolts of the budget plan.

“There’s no need for you to stay in town,” Senate Appropriations Chairman Tom Lee, R-Brandon, told colleagues eager to head home for the weekend.

At the heart of the disagreement lies what to do about the coverage expansion and the Low Income Pool, or LIP, program that is largely used to cover the expenses of uninsured, low-income Floridians who show up at hospitals needing treatment. The $2.2 billion LIP program is set to expire June 30 unless the state can reach a new agreement with the federal Centers for Medicare & Medicaid Services.

Federal officials and the Senate would like to see the House and Gov. Rick Scott consider the Medicaid expansion alternative in conjunction with LIP. But Scott and House leaders are fiercely opposed to tapping the expansion funds, which come from the federal Affordable Care Act, commonly known as Obamacare.

The House is now proposing to use up to $600 million in state funds to draw down additional federal money to shore up hospitals in case the federal government rejects a new version of LIP or comes back with a significantly smaller figure. That is the amount the Senate has called for if the state has to replace LIP.

But House Speaker Steve Crisafulli, R-Merritt Island, said the Senate has to abandon its expansion plan first.

“We stand ready, willing, and able to partner with the Florida Senate on joint priorities,” the House said in an unsigned, written offer to the Senate. “There is no need to use Medicaid expansion as a condition for finishing our constitutional duty to pass a balanced budget.”

The Senate response, which came after a “deadline” requested by the House: No dice. The upper chamber has said that LIP or a state replacement and the $2.8 billion expansion program are both needed to give long-term stability to hospitals and other medical providers and to prevent damage to the state’s economy.

“Equipped with this knowledge, we are not willing to rush to a resolution that could damage our economy — particularly when there is a clear alternative available to maximize federal taxpayer dollars returning to Florida while staying true to the Medicaid reform principles we all support,” Gardiner wrote in a response.

Senate leaders also want to wait to hear back from federal officials on the state’s LIP proposal before finalizing any budget. Most provocatively, the upper chamber wants to communicate directly with the Centers for Medicare & Medicaid Services.

When two senators traveled to Washington late last month to get a direct update, the trip angered the Scott administration, which has been handling formal negotiations with the federal government.

“We’re indicating to the House and to the governor that the Senate would like to take a much more active role in asking questions of CMS, because we need to know,” Gardiner said.

The House points out that a response from the federal agency could take until early July — after the beginning of the state’s budget year. But Gardiner says it’s almost impossible to move forward on a reliable budget without at least an understanding of how much money the state can expect once the federal government makes its decision.

“Out of respect for everybody … let’s make sure that we give CMS every opportunity to give us a number that puts us in a position where we can make a decision and we’re not back here later making cuts because something bad happened,” he said.

The two chambers also disagree on how to handle the negotiations if little progress has been made by next Friday, the scheduled end of the regular legislative session. The Senate would like to extend the session until June 30, the day before the state’s budget year begins, if necessary. According to senators, that would make the process for passing a budget easier.

Under the Senate plan, lawmakers would likely still return home and return to seal any budget deal. But remaining in session would prevent lawmakers from campaign fundraising in the interim. Doing so would also make it more difficult for Scott to call a special session, something that would give him much more control over the agenda — though lawmakers could achieve that goal by simply calling a special session on their own.

The House, for its part, says there’s no need to keep the session going unless the talks are moving ahead.

“I think you would extend the session if next week we’re talking about budget negotiations. It would be foolish for us to leave otherwise,” Crisafulli said. “But if we’re not getting into a point of where we’re working through a reasonable approach to solve the budget impasse, then we would leave and reset and take a clear mind and come back.”

Despite their differences, lawmakers seemed buoyed by the fact that something like a negotiation was finally underway after weeks of gridlock.

“While that conversation is a little narrow for our taste right now, at least we’re talking,” Lee said.

–Brandon Larrabee, News Service of Florida