Medicaid plan could tap private insurance

The program's costs have increased 13 percent a year for 6 years.


Published: Wednesday, January 12, 2005 at 6:01 a.m.
Last Modified: Wednesday, January 12, 2005 at 1:07 a.m.

Gov. Jeb Bush wants to transform the state's Medicaid program into a system more like private insurance, saying it will otherwise collapse under its own costs.

Bush floated his plan Tuesday, saying the 40-year-old health care safety net for uninsured nursing home patients and the poor is in danger of failure without a complete revamping because of double-digit annual cost increases that can't be predicted. He cited Tennessee, whose governor this week said nearly half the adults covered by that state's program would have to be dropped because of rising costs.

Bush said the plan was still a work in progress, but he envisions giving people with different health care needs more flexibility to choose between plans, including some run by private companies. The plan also would reward those who make healthy lifestyle choices, such as not smoking. And he proposes taking a maze of government rules on what is covered out of the system.

``They will deal directly with their doctors rather than government to make their health care decisions,'' Bush said.

Under the plan, which would need approval from Florida lawmakers and the federal government, the government would essentially pay the premiums of Medicaid recipients for health care plans offered by private insurance companies and health maintenance organizations.

Participating insurers or HMOs would set limits on care and coverage,

rather than the government. And the person in the Medicaid plan theoretically would have a say over what they get.

For example, a single mother might choose a plan that provides better coverage of vaccinations and other well care for children, but little prescription coverage, while a retiree might choose a plan with better prescription drug coverage and no options for children.

Under such a system, private insurance providers and HMOs would compete to serve Medicaid patients, saving money, Bush argues.

Bush said he anticipates all services currently covered by Medicaid continuing under various plans in the new system, which would be phased in starting later this year if it's approved.

The new plan also is intended to place a greater focus on healthy lifestyles and preventive medicine - encouraging patients to live healthy to avoid greater costs down the road.

About 2.2 million Floridians are covered by Medicaid. Two-thirds of all nursing home care in Florida is paid for by Medicaid, and about half of all births are covered by the program.

Medicaid costs have been skyrocketing and threaten to consume even more of the state's budget. The program already accounts for a quarter of what the state spends, and projections are it could be 35 percent of the budget in four years if something isn't done.

In the past six years, Medicaid spending has grown on average about 13 percent a year in Florida, more than double the annual growth in state revenue.

``That's just unsustainable under any set of circumstances,'' said Alan Levine, the head of the state's Agency for Health Care Administration.

Republican legislative leaders in Florida agree with Bush's assessment of the need for the overhaul and generally sound supportive of his proposal.

``Doing nothing is simply not an option if we are to adequately fund Medicaid and all the state's other critical needs,'' warned House Speaker Allan Bense, R-Panama City.

But critics quickly emerged, with concerns about private companies making decisions that may be in their interest, rather than that of the Medicaid beneficiary.

Bush's use of the term ``defined contribution'' as a method for controlling costs alarms Karen Woodall, a longtime advocate for low-income Floridians.

``Defined contributions. That's another way to say, `capping the program,' '' Woodall said.

``It means you're going to put a limit on what people can expend on health care. What happens if an individual goes above and beyond their defined contribution?''

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