The federal government has agreed to restore $1.5 billion to a state program that repays hospitals that care for the uninsured, Gov. Rick Scott announced Wednesday.
The pot of money, called the Low Income Pool, was set to expire this year but has been part of broader negotiations over Florida's Medicaid program between state and federal officials.
"Working with the Trump Administration to secure a commitment of $1.5 billion in LIP funding for our state will truly improve the quality and access to health care for our most vulnerable populations," Scott said in a statement.
Three years ago, LIP was a $2 billion a year program funded by local tax dollars and matching federal funds. However, President Barack Obama's administration pushed to end the program after Florida refused to expand Medicaid under the Affordable Care Act.
As a result, the program shrank over the last two years. Federal officials said Wednesday that they were restoring a portion of the LIP program in an effort to give the state more autonomy in its Medicaid program.
Hospitals reacted favorably to the announcement, calling it an encouraging step.
"We commend the Scott Administration and Trump Administration for working quickly to come to an agreement on funding health care for Florida's most vulnerable citizens. This timely decision gives the Legislature the critical information it needs to develop its Health and Human Services budget," said Bruce Rueben, president of the Florida Hospital Association.
"The LIP funding helps our safety net hospitals carry out their mission of providing highly specialized, expensive and primary care to all citizens, regardless of their ability to pay," Tony Carvalho, president of the Safety Net Hospital Alliance of Florida said.
On Wednesday, Senate Democrats failed in a renewed attempt too expand Medicaid to Floridians living at 138 percent of the federal poverty level. Doing so would have offered insurance to an estimated 800,000 people in the so-called "coverage gap" -- those who make too much money to qualify for Medicaid but not enough to afford their own insurance.
The $1.5 billion pool could offset proposed cuts to Medicaid that hospitals say will increase costs for other patients, and they could help bridge a major gap between the House and Senate.
Hospitals currently face a $621.8 million cut in the House budget and a $258.6 million cut in the Senate's, though the Senate has been planning on a $600 million LIP program.
The House and Senate also announced they will begin negotiating differences over another major budget item as early as Monday: the future of the gambling compact with the Seminole Tribe.