Florida Legislature Passes Governor’s Managed-Care Medicaid Bill

Florida lawmakers Thursday approved ambitious changes in the state’s Medicaid program that call for beneficiaries to contract with private companies that would determine what healthcare, and how much of it, they received.

In what could become a model for other states plagued by increases in Medicaid costs, Gov. Jeb Bush wants the program that serves 2.2 million poor, disabled and elderly Floridians to be run more like a private insurance plan. Basics are required by the federal government, but the insurer would decide the level and duration of additional coverage.

“What the Legislature has done today is the single biggest change and the boldest reform since the beginning of Medicaid,” Bush said.

The governor said he would sign the bill, passed 26-14 by the state Senate and 87-31 by the House.

Opponents of the proposal contended it could result in more limited care for the state’s Medicaid recipients, whom they said may have to pay out of their own pocket for doctor’s services, prescription drugs or items such as wheelchairs that they now get at no cost.

“This could set a really dangerous precedent for the rest of the country,” said Sarabeth Zemel, policy analyst for Families USA, a healthcare consumer advocacy group based in Washington.

“A lot of other states are looking at what Florida is doing.”

Under the plan, which will launch on a pilot basis, beneficiaries can choose from state-approved managed-care plans, all of which must furnish mandatory services outlined by federal law.

If beneficiaries do not choose a plan, they will be enrolled in one chosen by the state.

Medicaid beneficiaries could opt out of Medicaid and use their vouchers to pay for employer-sponsored health plans.

The program could eventually be extended statewide, but that would require the approval of Florida lawmakers and federal regulators.

Most Democrats in Florida’s Republican-controlled Legislature voted against the changes.

“Who will be the losers?” said state Sen. Les Miller, a Democrat from Tampa. “It will be the sickest, the oldest and those children who did not ask to be born poor.”

But if Medicaid is left untouched, Bush said, a program he called “large, complex and cumbersome” in its present form could consume nearly 60% of Florida’s budget by 2015. This year, outlays for Medicaid are expected to reach $16 billion, or 25% of the state budget, and Florida officials say the program’s costs have been growing 13% a year on average for the last six years.

In October, the federal government approved the Republican governor’s plan, under which Medicaid beneficiaries in Florida will be given a voucher based on their health needs and history, and be free to shop for the managed-care plan whose benefits package best suits them.

That, Bush said, “will empower beneficiaries to make choices,” reward people who behave responsibly and bring market competition to bear on costs. Under the present system, doctors of Medicaid patients can bill the state for whatever services they deem necessary.

If Bush’s formula for transforming Medicaid works, he could benefit politically, analysts said.

With little more than a year left in his second and final term as governor, Bush is tackling a public policy issue no other politician, including his brother President Bush, has been able to crack, said Lance deHaven-Smith, a professor of political science at Florida State University.

“If he’s successful with it, he’ll have done something to help the poor, but done it in a way that uses a pro-business philosophy,” deHaven-Smith said, adding that curbing Medicaid costs “is a problem that nobody else has solved. If he’s successful, he’ll be the dragon slayer.”

But if the governor’s plan flops, deHaven-Smith said, he runs the risk of being remembered like the football player who muffs a potentially winning pass on the last play of the game.

“Drop it, and you’re the goat,” deHaven-Smith said.

More than half of Florida’s Medicaid budget goes to nursing home care for the elderly. With baby boomers on the cusp of retirement, that category of beneficiary inside and outside the state is likely to increase.

Some powerful interest groups -- including the AARP, which has 2.7 million members in Florida -- oppose compelling Medicaid recipients to shop for a health maintenance organization or other care provider, questioning whether those with senility or Alzheimer’s disease could make informed choices. What’s more, said Lori Parham, the organization’s advocacy manager for Florida, nothing proves that Bush’s plan will be more efficient.

“On average, Medicaid administrative costs are 3% to 4%” of a total medical bill, Parham said, “while it’s up to 20% for an HMO. And private healthcare costs have risen at a much greater rate” than Medicaid’s.

“The evidence just isn’t there that the governor’s plan will lead to big savings,” she said.

The changes to Florida’s Medicaid program will begin in July and affect 210,000 recipients in the Fort Lauderdale and Jacksonville areas.

In October, Health and Human Services Secretary Mike Leavitt approved the pilot program, saying more “competition and consumer choice” would improve the care Medicaid beneficiaries got.

Republican Rep. Anna Benson, the bill’s sponsor in the Florida House, argued it was vital to change the status quo, for the sake of economy and effectiveness.

“Our Medicaid budget is growing exponentially, by 62% in the last four years,” she said. “In addition, for that nearly $16 billion, we’re not buying good healthcare outcomes.”

Benson said the new plan should provide for better access to general practitioners and specialists, many of whom now refuse to take Medicaid patients, and give better guidance to recipients on how to get and stay healthy.

“Now there’s nobody who says you need to go to the doctor,” she said.

In the future, an HMO might require an expectant mother to see a doctor regularly. “Seven prenatal visits is cheaper than one day in intensive care,” Benson said.

Rep. Anne M. Gannon, a Democratic opponent of the plan, said it would “slow our ability to service clients.”

She said she was especially concerned about the quality of care some Floridians might receive.

Of the seven or eight HMOs in Florida that would be expected to accept Medicaid recipients, only one has furnished information on its services to a national accrediting organization, Gannon said.

“We are making the people of Florida into a guinea pig,” she said. “We need to slow down.”