Florida Hospitals Press Governor on Medicaid

Florida Gov. Rick Scott said his state won't expand Medicaid under the health-care overhaul, setting up a clash with his former hospital-industry peers.

Mr. Scott, a Republican, emerged over the weekend as one of the first governors to say he will opt out of expanding the federal-state insurance program for the poor. The Supreme Court's health-care decision last week gave states the new option of sitting out the expansion without sacrificing their existing federal Medicaid funding.

The governor's office made the decision official in an announcement late Sunday, after Mr. Scott signaled his decision in an interview with Fox News on Friday.

"Since Florida is legally allowed to opt out, that's the right decision for our citizens," he said in a statement.

Implementation or rejection of the Medicaid expansion would require legislation to be drafted, submitted and voted on when the Florida Legislature reconvenes in 2013, according to a spokesman for incoming House Speaker Will Weatherford, also a Republican. The governor could veto the resulting legislation. The Legislature is controlled by the GOP.

A handful of Republican-led states, including Louisiana, Wisconsin and South Carolina, have indicated that they may opt out of the Medicaid expansion.

Florida also said it wouldn't create its own health-insurance exchange under the law—a state-by-state marketplace for the sale of insurance—opening the door for the federal government to step in and create one for it.

Hospitals in the state have said they will push Mr. Scott, who was chief executive of Columbia/HCA Healthcare Corp., on the matter. (The successor company is HCA Holdings Inc.) They say they need the Medicaid expansion to help trim the cost of emergency-room care for uninsured people, which they are required to provide by federal law, as well as the costs of bad debt and charity care. They are in a particular bind because the health-care law also includes cutbacks in federal payments, including reductions in compensation they currently receive for serving low-income patients.

"Our governor understands acute-care delivery and financing," said Bruce Rueben, president of the Florida Hospital Association. "He probably understands the consequences for hospitals" if they continue to have to provide care for people who lack coverage while sustaining cuts to public programs.

Some Florida Republicans were wary of the governor's stance as well. Mike Fasano, a state senator from the Tampa Bay area who has opposed Mr. Scott in the past over budget and public-policy issues, said the Legislature would have the final say over whether Florida accepts funding for the Medicaid expansion. He wants the body to come up with a plan to replace Medicaid if it turns down the federal money.

"It's easy to sit in the back row and throw bombs all day and criticize the proposals that are coming out of Washington," he said. "But then we need a plan."