Florida received $1.5 billion a year for the low-income pool's uncompensated care costs from the Centers for Medicare and Medicaid Services Aug. 3, effective immediately.
The funds were distributed under a section 1115 waiver, known as Florida Managed Medical Assistance. Section 1115 waivers allow the U.S. Department of Health and Human Services the authority to approve experimental, pilot, or demonstration projects that promote the objectives of Medicaid, the federal and state health insurance program for low-income Americans.
Waivers can also be a vehicle for states to get extra money, which is the case with Florida's waiver, said Joan Alker, executive director of Georgetown University's Center for Children and Families.
The low-income pool was established to support the provision of healthcare services to Medicaid, underinsured and uninsured populations in 2005 by the Centers for Medicaid and Medicare Services.
The significance of the approval goes back to the Obama administration, which cut the uncompensated care pool by $600 million in 2015. The administration did not want to give Florida funds for people who are uninsured after the state chose not to adopt Medicaid expansion under the Affordable Care Act, according to Alker.
Medicaid expansion granted coverage to certain previously uninsured groups, whereas the low-income pool grants funds to certain hospitals that treat Medicaid, underinsured and uninsured patients. The pool itself does not provide anyone with coverage.
"It is interesting after we just went through an exercise of Congress potentially cutting $800 billion out of Medicaid with strong support from the president that now the administration's first move is to essentially give the state of Florida a billion dollars in Medicaid money," Alker said.
Texas currently has a low-income pool waiver that is set to expire at the end of the year. The Obama administration agreed to extend the waiver until 2017 at a rate of $3.1 billion, a significant reduction from previous levels, according to an April note from Cowen analyst Rick Weissenstein.
"Texas has even more money at stake, so we will see what happens, but I would think Texas would view as this as good sign for them," Alker said.
Florida will receive $1.5 billion annually for the low-income pool until 2022.