Insurance Law

2015 Post-Season Florida Insurance Report

Political Overview

Republicans fared well in the election cycle that preceded the 2015 Florida Legislative Session.  Despite a tight race, Republican Governor Rick Scott won re-election as did the other three GOP Cabinet members.  Additionally, Republicans took six House seats from the Democrats, regaining the two-thirds, veto-proof majority (81 to 39); and, in the Senate, they maintained their 12-member majority (26 to 14).

Florida’s fiscal future looked bright with nearly $1 billion in surplus revenues estimated for Fiscal Year 2015-16 which meant there would be plenty of opportunities for tax cuts and increased funding on legislative priorities.  Further, House Speaker Steve Crisafulli (R-Merritt Island) and Senate President Andy Gardiner (R-Orlando) crafted a joint legislative agenda that included increasing independence for the developmentally disabled, sustaining Florida’s natural resources, enhancing education funding levels and cutting taxes.

Yet, ultimately, a disagreement on health care funding drove a wedge between the two Republican presiding officers.  The result was a historic act of the House adjourning “sine die” on Tuesday, April 28th, three days before the scheduled end of the regular session on Friday, May 1st.

The disagreement originated from opposing opinions on how to address the expected $2.2 billion shortfall that would occur when the federal government ended the Low Income Pool (LIP) payments to hospitals providing indigent care.  The Senate budget assumed the $2.2 billion LIP funding would continue due to the ongoing negotiations between Florida and the federal government on a new funding model. The House proposal did not contain any LIP funding.

The Senate proposal also counted on drawing down an additional $2.8 billion in federal dollars by establishing subsidized health care coverage for approximately 800,000 low-income and uninsured Floridians.  Over the preceding two sessions, the House had maintained strong opposition to any coverage expansion through the state’s Medicaid program.  As a result, their total budget proposal was just over $4 billion less than the Senate proposal.

Early afternoon on April 28th, Speaker Crisafulli announced that the House and Senate were at a budget impasse and sent members home saying they would return for a special session after there was time for a “reset”.  Caught off guard, the Senate continued their work on bills in their possession, some of which were sent to the Governor.  Other issues, including President Gardiner’s priority of educational opportunities for the developmentally disabled and prison reform, were amended and sent back to the House.  Speaker Crisafulli’s priority, a large water policy package, was amended with the Senate version and returned to the House.

The following day, the Senate sent a letter to the Speaker questioning the constitutionality of the House’s early adjournment and calling upon them to return to work.  President Gardiner announced that the Senate would remain ready to work with the House until midnight on Friday, May 1st, the scheduled end of session.  The House responded that they would return to work when a special session was called.

The question remains on how the budget impasse will be resolved.  The LIP funding is scheduled to end on June 30th which coincides with the July 1st fiscal year when the 2015-16 Budget would take effect.  Adding his voice to the disagreement about health care funding, Governor Scott announced, the day before session was scheduled to end, the creation of the Commission on Healthcare and Hospital Funding (Commission) to examine how taxpayer dollars support hospitals, healthcare and insurance plans in Florida.  The Commission would evaluate the healthcare outcomes provided by the healthcare entities and also the Certificate of Need laws to determine if eliminating them would increase competition and decrease costs thereby lowering hospitals’ dependence on federal funding.  The Commission, of which the members have yet to be named, will begin work immediately with the goal of gathering information that would assist Florida lawmakers in building a budget for Fiscal Year 2015-16.

Click here to read the complete 2015 Post-Season Florida Insurance Report.

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