Florida's far-reaching bid to move Medicaid into the private market faces one last hurdle after state and federal officials successfully negotiated a waiver that includes up to $1 billion per year in subsidies for safety net hospitals.
The state Legislature must approve the terms before July 1, 2006, according to the agreement. Florida Gov. Jeb Bush, announcing the deal with HHS Secretary Mike Leavitt last week, said he will seek a special legislative session in December to gain lawmakers' approval.
Leavitt praised Florida's Medicaid experiment, which would start with a one-year pilot in two counties that gives most Medicaid enrollees three choices: managed care, provider service networks or opting out entirely and getting Medicaid money to put toward employer-sponsored insurance. Bush "has introduced, with this waiver, competition and consumer choice that will measurably improve the quality of care and will empower Florida's 2.2 million Medicaid beneficiaries," Leavitt said.
Not everyone is so convinced. The pilot, which can be expanded statewide with federal approval, gives insurers broad discretion over which benefits to cover as well as how much and for how long, said Joan Alker, a Georgetown University Health Policy Institute senior researcher. The waiver calls for the state to pay risk-adjusted premiums to private insurers.
Rising costs are driving Florida's push to revamp Medicaid. The state spent $15 billion on Medicaid in fiscal 2004, and its expenses for the plan grew 13% per year in the past six years. This concerns Alker, who said she fears the value of Florida's Medicaid premiums will wane over time as the state strives to control costs.