Scott drops Medicaid expansion, hospital funds lawsuit

FORT LAUDERDALE, Fla. (AP) – Florida Gov. Rick Scott said Thursday he’s dropping a lawsuit against the Obama administration after federal officials agreed in principle to extend federal hospital funds for two more years.

Scott credited the lawsuit with extending the funds, which had been scheduled to run out at the end of the month. The agreement will fund Florida’s hospital low-income pool, but at a reduced cost. Florida will receive $1 billion this year – about half of what the state had been receiving – and $600 million next year.

“Because of this great victory, we have decided to dismiss our lawsuit against the Obama Administration for attempting to coerce Florida into expanding Obamacare,” Scott said in a statement. “It is unfortunate it took a lawsuit to make the right thing happen.”

Scott’s lawsuit accuses the Obama administration of withholding the hospital funds because the state won’t expand Medicaid. In recent court documents, Scott showed no signs of withdrawing the lawsuit despite Tuesday’s announcement, noting the underlying disagreement between Florida and the Obama administration remains. That comes even though federal health officials have repeatedly said their decision about the funds is not tied to whether or not Florida expands Medicaid.

The Obama administration, hospitals and the state Senate wanted to expand Medicaid to roughly 800,000 Floridians to give them insurance directly instead of paying hospitals that care for the uninsured retroactively. But Scott and House Republicans are opposed to taking money tied to so-called Obamacare. Instead, the state will use $400 million from general revenue to funnel money to the hospitals by increasing Medicaid provider rates.

The U.S. Department of Justice declined to comment. Federal health officials did not immediately respond to requests for comment.

Lawmakers in eight others states that also receive the hospital funds have been watching the standoff closely as the Obama administration has said it will use the guidelines established in Florida to make decisions in those states.

The Republican governor’s announcement came the day that the Supreme Court delivered a major victory for the Obama administration, upholding tax credits for millions of consumers who bought health insurance under the president’s signature law.

Scott, who once ran a private, for-profit health care company, entered politics opposing the Affordable Care Act and led the effort to strike down the law.

Despite multiple requests from The Associated Press, officials in the governor’s office have refused to say how much a private attorney is being paid to lead the most recent lawsuit, nor whether that bill will be paid with taxpayer funds.