ObamaCare court fight escalates

The fight over ObamaCare’s Medicaid expansion escalated Monday, as Texas’s Republican governor backed a lawsuit from Florida against the Obama administration.

"When the federal government exceeds its constitutional authority, the States must take action,” Texas Gov. Greg Abbott said in a statement. “[I] commend Governor Rick Scott’s decision to take legal action to protect these important constitutional principles.”

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Last week, Scott announced he would sue the Obama administration over what he called an effort to illegally force Florida into expanding Medicaid under the Affordable Care Act. 

“It is appalling that President Obama would cut off federal healthcare dollars to Florida in an effort to force our state further into ObamaCare,” Scott said last week.

At issue is the Obama administration's move to link Florida’s rejection of the Medicaid expansion to separate federal funding that helps hospitals care for the uninsured. 

The administration says some Florida hospital funding will not be extended in its current form past the June expiration date, arguing that the money should not go toward costs that would otherwise be covered by an expansion of Medicaid under ObamaCare.

The administration has left the door open to providing some healthcare funding for Florida, however.

The White House is pressuring the state to expand the healthcare program for the poor, while referring questions on the details of the dispute to the federal Medicaid agency, the Centers for Medicare and Medicaid Services (CMS).

"It's difficult to explain why somebody would think that their political situation and their political interest is somehow more important than the livelihood and health of 800,000 people that they were elected to lead," White House press secretary Josh Earnest said Thursday when asked about the Florida lawsuit.

Aaron Albright, a spokesman for CMS, said the principles given to Florida apply in Texas and other states as well. 

“We will also use these principles in considering similar proposals in other states, but discussions with each state will also take into account state specific circumstances,” he said.

CMS communicated that message directly to Texas in a call on Thursday.

Scott argues the funding threat is a clear violation of the U.S. Supreme Court’s 2012 ObamaCare decision, which struck down mandatory expansion of Medicaid.

Since that ruling, states have had a choice of whether to expand Medicaid by making more of their residents eligible for the program. Twenty-eight states have accepted the increase in federal funding so far, including 10 with Republican governors. Montana is poised to become the 29th, as the legislature sent a bill to the governor's desk on Saturday.

Abbott made clear in his statement Monday that he remains firmly against Medicaid expansion and also objects to the Obama administration’s tactics. 

“Medicaid expansion is wrong for Texas,” he said. 

John Wittman, an Abbott spokesman, said it is “fair” to say that the prospect of losing the separate federal funds would not sway the governor from his opposition to Medicaid expansion. 

The stakes are high.

Texas spends about $29 billion over five years on programs for the uninsured and underinsured, the state said. Almost 60 percent of those costs are covered by the federal government. 

Without the federal funding, "the first thing you would see is the collapse of the rural healthcare system," said Lance Lunsford, vice president of the Texas Hospital Association. "They would start to have trouble to keep those hospitals afloat."

The Texas Hospital Association is pushing for a compromise Medicaid expansion, such as using the money to allow people to purchase private insurance, as Arkansas has done.

Florida and Texas are the two largest prizes for advocates seeking to boost Medicaid enrollment.

Around 800,000 people would gain healthcare coverage in Florida under the expansion of Medicaid, while more than 1 million new people would be enrolled in Texas. 

— Last updated at 3:55 p.m.