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Health care uncertainty looms over state budget talks

Major changes could be coming for millions of Floridians who get health care through Medicaid or through the federal exchanges of Obamacare.Just what those look like and when they will take effect is anyone's guess, leaving state lawmakers trying to piece together an $82 billion budget in a bind.Republicans in charge of the state Legislature are excited at the prospect of full GOP control of the federal government, with Donald Trump set to be sworn in as president.

They want to see Obamacare repealed and a block grant for Medicaid approved that gives them more leeway to run a program that takes up a large chunk of the state budget.Such revisions to health care in the state, though, could be years in the making, leaving state lawmakers to cobble together a budget with the status quo in place.Sen. Jack Latvala, R-Clearwater, said he wants the Florida Agency for Health Care Administration to lobby Trump officials for more money for Medicaid, as well as more flexibility to operate the program through a block grant.

"We want [AHCA] to be aggressive in terms of looking for block grants, looking for some increased help for the uninsured," Latvala said.

Medicaid provides health care to 4 million poor, disabled and elderly residents in Florida, with costs shared by the state and federal government. The program takes up nearly a third of the state's $82 billion budget, making it a big target for lawmakers looking to make cuts.

A block grant giving the state more flexibility would allow Florida to set its own standards for costs and care while still serving needy populations, Republican lawmakers argue.

There could be danger in a block grant as well, warned Justin Senior, ACHA secretary. If block grant funding is based on historical spending, Florida could lose out because it spends less than other large states. But if it's based on population, Florida's funding could rise.

Critics of the move to a block grant argue it could lead to fewer people being covered.

"Flexibility in the context of a block grant usually means the removal of consumer protections," said Karen Woodall, executive director of the Florida Center for Fiscal and Economic Policy, a Tallahassee-based liberal think tank.

But a block grant is no sure thing. Major changes to Medicaid would have to be approved by Congress, and Republicans only hold a two-seat majority in the U.S. Senate. Even if it were approved, a block grant wouldn't likely take effect until future years.

"That might be a substantive change that would require quite a bit of bipartisan consensus," Senior said. "So we would have to wait and see exactly what comes down from the federal government before we made any decisions about it."

Another big question mark surrounding Medicaid is the fate of the low income pool, or LIP, which uses local and federal tax dollars to pay hospitals for uninsured care.

It became a flashpoint in 2015 when Gov. Rick Scott sued the Washington for withholding LIP money as a way to pressure the state into expanding Medicaid in line with Obamacare. The uncertainty around the funding led to gridlock between the Florida House and Senate that required a special session to resolve the budget.

The federal government eventually approved more LIP funds but intended to phase them out. The state will receive $600 million this year after getting more than $1 billion in prior years.

How the new Trump administration will view the LIP portion of Medicaid is unknown.

Senior told Latvala he'll push for as much LIP money as he can get, but warned Trump officials could opt to shut down the program or decide to cut other states' funding rather than boost Florida's. Senior added that he'll reach an agreement on LIP funding with federal health officials sometime in March, when state lawmakers will be in the middle of writing the new budget.

The fate of Obamacare will also have a big impact on Florida. More than 1.7 million Floridians receive health care coverage through federal exchanges as part of the Affordable Care Act, more than any other state. If Republicans in Congress repeal the law without a replacement, it would leave them scrambling for coverage.

Scott wants Obamacare gone sooner rather than later because of increasing premiums and fewer choices for recipients. But he also wants to keep some parts of it, like the requirement for insurers to cover those with pre-existing conditions.

In a recent letter to congressional leaders, Scott urged them to repeal Obamacare as soon as possible, and asked for a block grant for Medicaid.

"We cannot let the usual partisan games or political gridlock of Washington get in the way of immediately repealing and replacing Obamacare with a plan that actually works for all Americans," Scott wrote.

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