The drama over a budget impasse escalated Wednesday after Gov. Rick Scott called Republican senators separately into his office and threatened to use his veto pen if he doesn’t get support for one of his top legislative priorities.
While the House has already signed off on more than $600 million in tax breaks sought by Scott, GOP Senate leaders have put the tax cuts in limbo, signaling that the governor’s priority might be a victim of a $5 billion health-care schism between the two chambers.
The Senate has earmarked $2.2 billion to revamp the federally-backed Low Income Pool, or LIP, program that steers funding to hospitals and health-care providers that serve large numbers of poor and uninsured patients. The program is slated to expire on June 30, and federal officials have said for at least a year that they will not renew it in its current form.
Senators have also allocated $2.8 billion that would use Medicaid expansion funds — part of the Affordable Care Act, known as “Obamacare” — to provide private health insurance to low-income Floridians. Scott and House Republicans oppose the Medicaid proposal, and the House also hasn’t budgeted money for LIP.
“The governor called me in to express his discomfort with the Senate’s position on the Medicaid expansion and the LIP,” Sen. Greg Evers, R-Baker, said Wednesday afternoon. “I don’t know if he threatened vetoes. He just said that all priorities will be dead.”
Scott, who made his fortune in the for-profit hospital industry, injected a new argument into the LIP mix by providing the senators spreadsheets showing profits made by hospitals participating in the program. Scott’s administration earlier this week submitted to the federal government a LIP plan based on a Senate model.
It isn’t unusual for a governor to flex his executive muscle as the session draws to a close. Former Gov. Jeb Bush used to walk the Capitol halls to lobby legislators on issues, Senate budget chief Tom Lee recalled Wednesday when reporters asked him about Scott’s actions.
But Scott’s pressure tactics probably won’t help resolve the stalemate, Lee, a former Senate president, said.
“It tends to galvanize the membership around their president. The most dangerous guy in Tallahassee is always the guy with no hope. So when you extinguish the flame of hope from the members, you give them no reason to negotiate,” Lee, R-Brandon, said. “So my encouragement would be for us all to put all this behind us and move forward. And that comes from someone who doesn’t entirely have clean hands.”
Late Wednesday afternoon, Scott told reporters he spoke to the senators about his three legislative priorities — tax cuts, making higher education more affordable and record levels of spending on public schools.
“I remain optimistic that all those priorities will get done. I know what’s important is the House, the Senate and the governor need to find a way to work together to make sure it’s good for all of our citizens, and that’s what we talked about today,” Scott said.
Scott would not say if he believed non-profit, “safety net” hospitals were too profitable to deserve the LIP funding, a mix of local and federal dollars.
But the former health care executive, who on Tuesday threatened to create a commission to examine hospital finances, called on his boyhood experiences to explain his view on the issue.
“Here’s the way I look at it. We want to make sure that all of our citizens have the opportunity to get health care. That’s important to every family. I grew up in a family that most of the time didn’t have health insurance. I had a brother that had to go to a hospital, Shriners, that was four hours away. He couldn’t get health care that my parents could afford. … So I know it’s important,” Scott said. “As we invest, whether it’s through our Medicaid program, whether it’s through other types of programs like LIP where there’s investments in our health care community, we ought to understand how the dollars are spent. And we ought to make sure when we’re taking Florida taxpayer money that it’s spent the way that we can help as many people as possible have health care that they can afford and that they can actually receive that they feel good about.”
Tony Carvalho, president of the Safety Net Hospital Alliance of Florida, issued a statement early Wednesday evening that said losing the LIP program would result in an overall operating deficit of $541 million for safety-net hospitals, which include public hospitals, teaching hospitals and children’s hospitals. He said losing the LIP money would “put most of these providers at a significant risk.”
“You can’t determine the financial strength of a hospital based on a one-year operating margin,” Carvalho said in the statement. “If you look back at the most recent recession, many of the hospitals that were losing money three years ago are now doing better and reinvesting in their communities. Hospitals are going to have cycles and they have to prepare for them.”
Scott intends to sue the Obama administration over federal officials’ attempt to link the LIP issue and Medicaid expansion. Key players in the business community and the health-care industry have supported using the Medicaid money to expand health coverage, but the idea has been vehemently opposed by groups like the conservative Americans for Prosperity.
GOP leaders in both chambers have said the deadlock over health-care spending will prevent lawmakers from finishing the legislative session on May 1 as scheduled. Senators indicated that Scott’s concerns about hospital funding — 10 days before the session is supposed to end — come too late for any serious consideration.
Sen. Garrett Richter said he spoke with Scott over the weekend.
“He indicated to me that he thought that something that was important is that we take a look at the cost structures within the hospitals right now,” Richter, R-Naples, said.
Scott also expressed a concern about lack of competition between hospitals and competition over being able to open new facilities, Richter said.
“I in turn expressed to him that that may be a very bona fide discussion to have, but we should have started that discussion a year ago,” Richter said. “There’s just not enough time to take it on.”