Report

Florida is Test Bed for Medicaid Overhaul

Antoine, who is legally blind and suffers from high blood pressure caused by diabetes, was admitted for a day in February because she couldn't refill her blood-pressure medicine quickly enough under the new system, said her daughter, Betty Antoine.

It's exactly the type of avoidable -- and costly -- hospitalization that Florida's two-county experiment was supposed to prevent.

There's a lot riding on the outcome of the two-year trial that former Gov. Jeb Bush (R) called "the single biggest change and the boldest reform that any state has embarked on for the Medicaid program." This year, Florida is expanding the program to three more counties, and it could go statewide as early as next year if the Legislature opts to expand it.

Other states are watching, too. That's because rising Medicaid costs are swamping state budgets around the country. Accounting for 23 percent of all states' spending, the taxpayer-funded health program for 59 million poor Americans is gobbling up more state money than even primary and secondary education. The federal government wants to keep Medicaid costs down, too, because it pays for 57 percent of the $330 billion program.

Florida is one of several states trying to hold down medical costs for the families, pregnant moms, elderly and disabled on Medicaid. Its experiment emphasizes disease prevention, rewards for healthy behavior and managed care.

Idaho, Kentucky, Missouri and West Virginia revamped their Medicaid systems based on similar ideas. But Florida goes furthest in relying on market forces to drive down costs, leading former U.S. House Speaker Newt Gingrich (R) to routinely tout the Sunshine State's project as a model for a dramatic overhaul of Medicaid.

The promise is to save state money by making Medicaid patients healthier and by using private insurance companies to hold down those patients' medical bills.

That means putting Medicaid participants in the same type of health-insurance programs most Americans get through the private sector. So enrollees, who are poor and tend to be sicker than the rest of the population, now must navigate the same dizzying array of rules common in employer-based insurance plans. Some Medicaid participants face even more difficulties because they are blind, deaf, elderly or mentally ill.

Competition is the key to the Florida experiment. Medicaid enrollees can choose among 15 competing insurers in the Ft. Lauderdale area and six in the Jacksonville area. They can decide, say, between a plan with few out-of-pocket expenses or one offering more services. Insurers get paid for every recipient they enroll.

Although the competition among multiple insurers is new, managed care in Florida Medicaid is not; the state has used health maintenance organizations (HMOs) for 25 years.

Still, the switch can be jarring for patients used to Medicaid's typical "fee-for-service" coverage, where doctors and hospitals bill the state after treating patients.

Halfway through a two-year test run, Florida's experiment has met mixed success.

  • For starters, no one knows yet whether it will save money, one of the program's main goals. State officials say it's no more expensive than the old way, but they'll need six to nine more months to get enough data to compare costs.
  • State officials and patient groups disagree -- often heatedly -- over how chronically ill patients have fared. The state reports few complaints. But people who work with mentally ill, blind, deaf, disabled or HIV-positive patients say they're not getting needed treatment.
  • Patients and some doctors say fewer physicians, especially specialists, are taking Medicaid patients in the two counties that are part of the experiment. But insurers and the state say there's no exodus of doctors leaving Medicaid.
  • Patients aren't taking advantage of rewards they get for staying healthy, such as by quitting smoking and keeping doctor appointments. By June 25, participants racked up more than $3.7 million in rewards, which they can use to buy health products at drug stores. But, so far, they've only redeemed $93,000 worth.

Read the full report on the Stateline.org Web site.