But the federal government has warned Florida that the LIP program could not continue in its current form, particularly since the state had the ability to extend Medicaid coverage to many of the uninsured people whose costs were being covered by LIP. Under Obamacare, the federal government has promised to fund 100 percent of the costs of newly eligible people for the first three years if states expand Medicaid, with that share decreasing over time to no less than 90 percent of costs.
So far, 29 states and the District of Columbia have expanded Medicaid.
Under traditional Medicaid, which in many states had stricter limitations on who could be covered, the federal government more evenly splits the costs of covering enrollees with individual states.
"Coverage is the best way to secure affordable access to health care for low-income individuals, and uncompensated care pool funding should not pay for costs that would be paid for in a Medicaid expansion," CMS wrote to Florida's deputy secretary for Medicaid, Justin Senior, on Thursday.
A spokeswoman for Scott, a Republican, when asked about the letter, said, "We are reviewing it now."
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Scott has expressed fears that the state would incur higher costs by expanding Medicaid, and also has said that he is worried the federal government would renege on its promise to subsidize expansion at no less than 90 percent of costs.
The Obama administration, in turn, has said those fears are unfounded.
The president of Florida's Senate, which has voted to adopt Medicaid expansion, in a reported memo to members of that chamber, said about the letter, "The news brings certainty to what we have known for over a year—the LIP program is changing and Florida needs a new way to address uncompensated care."
Senate President Andy Gardiner, a Republican, wrote, "It remains clear that a sustainable long-term solution is needed. As you are aware, the Senate has proposed a Florida solution that will promote the well-being of our constituents and protect the fiscal health of our state."
House Speaker Steve Crisafulli, also a Republican, said his chamber, which has opposed Medicaid expansion, is reviewing the letter.
A special budget session for the Legislature is scheduled to begin June 1.