Press Release

White House Threatens Medicaid Cuts in Texas, Florida

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White House Threatens Medicaid Cuts in Texas, Florida 

(Washington D.C.) - The Obama Administration has informed state officials in both Texas and Florida that if they do not expand their state Medicaid programs - as is optional under the Affordable Care Act (ACA, or Obamacare) - they may lose millions in annual funding that they have received for care of indigent patients. The threat comes as the federal government prepares to renew the Low-Income Pool, which provides billions in funding to each state over time. The funding is intended to compensate for the care of patients who are unable to pay for their own care. The Centers for Medicare and Medicaid Services (CMS) has indicated to Texas officials that state expansion of Medicaid under the Affordable Care Act (ACA) would be a deciding factor in setting conditions for the funding stream. Florida is currently facing the same situation, which has paralyzed Budget negotiations in Tallahassee. Both governors have threatened to sue the federal government if they were to cut Medicaid funding merely because a state has not opted in to an optional part of the ACA. The Supreme Court previously ruled that the federal government could not cut off funding for existing Medicaid programs if states refused to expand. This new move by the White House seems intended to reinstate the same type of threat.

Daniel Garza, Executive Director of The LIBRE Initiative, released the following statement:

"It's not the federal government's position to dictate what's best for each state, particularly when it comes to programs that are clearly optional under federal law. Opting in to this part of the health care law would cost taxpayers in Florida and Texas hundreds of millions annually. Now the Obama Administration vows that if taxpayers don't pay more, they will lose Medicaid funds that they have long counted on. This is wrong, pure and simple. The Supreme Court has clearly rejected this approach.

This is ultimately a state decision and governors are right not to rush to add millions each year in new taxpayer-funded health care costs. It has been clear for some time that the federal Medicaid program might face cuts that will transfer new costs to state taxpayers. Now the White House is going to impose those cuts on states that have been careful not to embark on unsustainable spending paths. This will not work. President Obama should work with governors – and not strong-arm them -- in Texas, Florida, and elsewhere to address critical health care needs without imposing dramatic new costs on taxpayers."

For interviews with a LIBRE representative, please contact: Brian Faughnan, 703-678-4581 or Josh Rivera, 202-763-4428.