In 2011 the Florida state legislature approved a statute authorizing the state to make significant changes to Florida’s Medicaid Reform program already in existence as a pilot. The changes impacted only the five counties engaged in the pilot since 2006. In 2012 Floridians could see additional, wide-ranging changes to their Medicaid health insurance program as the modified plan expands throughout the state and as the federal government intervenes.
Passed in May, the bill shifted Medicaid health insurance recipients from the government-centered effort that provides affordable health care to low-income families by paying providers for services to managed-care companies that are contractually obligated to provide services and meet cost-reduction goals, according to an article in the Sunshine State News. The article highlighted the motivation on the part of state leaders to reduce Medicaid costs that eat up nearly 30 percent of the state’s annual budget. Fifty percent of those funds come from the federal government.
In a detailed review of Florida’s changes, the Georgetown University Health Policy Institute said some program changes that the state is seeking require waiver authority from the federal government and others do not. Principle among the changes, the institute said, is a desire to move much of Florida’s acute and long-term care services into capitated managed care. Capitated managed care means a managed care company receives monthly payments to cover most or all of the services that a beneficiary receives rather than providers being paid on a fee-for-service basis.
To understand the federal government’s interest in Florida’s doings, the Georgetown paper pointed out “in the next three fiscal years, it is estimated that for every $1 Florida spends on Medicaid, the federal government will give the state 58-59 cents. Currently, annual costs for Florida Medicaid health insurance program are slightly less than $20.3 billion.” This “open-ended source” of funding coming from the federal government does have strings attached. When Florida embarks on a new approach or idea and uses federal matching funds, the state must request a waiver of existing federal Medicaid rules. Thus the state’s proposed changes in 2012 including the move of long-term care services to managed care will come under scrutiny of Medicaid officials in the very near future.
The Georgetown assessment goes on to suggest that the change from long-term care to private sector management care will not save the state money in the long run and the report describes why: “ Florida’s general fund revenues have declined 10.3 percent over the past five years while enrollment in the state’s Medicaid program has grown by approximately one million persons. Increases in Florida’s costs are very closely correlated to this increase in enrollment. The trends are important because, by contrast, cost growth in the private-sector health system is primarily due to cost of services going up – rather than more people being covered, as is the case in Florida’s Medicaid program. Florida’s Medicaid program is in fact more efficient than the private sector in containing costs – in large part due to low provider reimbursement rates.”
While the Georgetown Health Policy Institute report calls into the question the Florida state legislature’s actions and its impact on Medicaid beneficiaries, the Heritage Foundation praises the state for seeking solutions to a nationwide problem.
“Florida’s Medicaid Reform Pilot is pro-patient and pro-taxpayer,” says the Foundation report. “The Florida reforms work by giving patients a choice of the private health plan that works best for them. Enrollees can choose from plans with varied benefits and provider networks, and a monetary awards system creates incentives for healthy, responsible behavior. By shifting away from failed policies of central planning toward a consumer-driven program, the program has been successful on a number of levels.”
The Heritage Foundation report also says the waiver extension of Florida’s “patient-centered Medicaid reform preserves the expanded choices, incentives for healthy behavior, and increased health services that pilot patients have enjoyed for years. “Pilot patients have better health outcomes and report higher satisfaction rates with their plans, their care, and their access to specialists than their counterparts who are confined to traditional Medicaid and commercial HMOs.”
While the debate over Florida’s new Medicaid health insurance reform program has taken a classic right versus left, government-control versus private sector-control argument, the people who depend on Florida’s maintenance of this vital program will need to watch closely as the federal government negotiates with the state of Florida in 2012. State inspired innovations to Medicaid are here to stay as local governments struggle to bear the burden of Medicaid. But federal interest in maintaining the basic look and feel of Medicaid is no less assured. Unless these competing entities can find common ground and a compelling reason to comprise, needed Medicaid reform will continue to flounder putting millions of low-income and other citizens at risk in the future.