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US Gives Florida a Sweeping Right to Curb Medicaid
By ROBERT PEAR
10/21/05 "The
New York Times" -- -- WASHINGTON -- The Bush
administration Wednesday approved a sweeping Medicaid plan for
Florida that limits spending for many of the 2.2 million
beneficiaries and gives private health plans new freedom to limit
benefits.
The Florida program, likely to be a model for many other states,
shifts from Medicaid's traditional "defined benefit" plan to a
"defined contribution" plan, under which the state sets a ceiling on
spending for each Medicaid recipient. Children under the age of 21
and pregnant women will be exempt from the spending limits.
(In Polk County, roughly 71,000 residents -- or about 15 percent of
the population -- are covered by the Medicaid insurance program.)
Florida's plan says "the state will set aside a specific amount of
money for each person enrolled in Medicaid," based on the person's
medical condition and historic use of health care.
Michael O. Leavitt, the secretary of health and human services,
approved the Florida proposal just 16 days after it was formally
submitted to him, with strong support from Gov. Jeb Bush. After
meeting in Washington with the governor Wednesday afternoon, Leavitt
said: "Today will be remembered as a day of transformation for the
Florida Medicaid program. Florida's framework will be helpful to
other states."
Joan C. Alker, a senior researcher at the Health Policy Institute of
Georgetown University, said, "Florida's proposal is one of the most
far-reaching and radical proposals we've seen to restructure
Medicaid. The federal government and the states now decide which
benefits people get. Under the Florida plan, many of those decisions
will be made by private health plans, out of public view."
Vernon K. Smith, a former Medicaid director in Michigan who is now a
consultant to many states, said, "Florida's program is
groundbreaking. Every other state will be watching Florida's
experience. South Carolina has developed a similar proposal. Georgia
and Kentucky are waiting in the wings."
In his state of the state speech to the Florida Legislature in
March, Bush called for complete transformation of Medicaid, saying
it was unsustainable in its current form. "Over the last six years,"
he said, "Medicaid costs have increased an average of more than 13
percent annually. State revenues grew an average of 6 percent a
year."
The Florida plan, to be put into effect over five years, will
significantly increase the use of managed care. Questions and
answers prepared by federal officials say that a principal aim of
the Florida program is "to bring predictability to Medicaid spending
and to reduce Medicaid's rate of growth."
President Bush has proposed similar changes at the federal level for
several years, but Congress did not accept his ideas. In Congress,
Democrats and some moderate Republicans resisted the president's
proposals, on the grounds that they would have allowed states to cut
back coverage for people who were very poor and very sick. In his
action Wednesday, Leavitt waived many provisions of federal law,
allowing Florida to make the changes as part of a demonstration
project.
Under the waiver, Florida will establish "a maximum per-year benefit
limit" for each recipient and change its role in fundamental ways.
The state will be largely a purchaser, rather than a manager, of
health care services.
In an interview, Alan M. Levine, secretary of the Florida Agency for
Health Care Administration, estimated that no more than 5 percent of
Medicaid recipients would hit the annual limit. At that point, he
said, "the plan will still be responsible for providing services to
the consumer, but the state's reimbursement would be limited to that
amount."
Asked if the beneficiary would be personally responsible for paying
costs beyond the limit, Levine said, "That can happen today. There
are arbitrary limits and caps embedded in the state Medicaid program
-- limits on home health services, doctors' visits, prescription
drugs."
For each Medicaid beneficiary, Florida will pay a monthly premium to
a private health plan. Insurance plans will be allowed to limit "the
amount, duration and scope" of health care services in ways not
permitted by current law.
Thomas W. Arnold, the Florida Medicaid director, said he thought
that insurers would tailor their benefits to meet the needs of
different groups of Medicaid recipients, including people with AIDS
and children with chronic illnesses.
About half of Florida's Medicaid recipients are children, but they
account for less than 20 percent of costs.
The Florida program includes these features, approved Wednesday by
the federal government:
If a Medicaid recipient does not choose a private health plan, the
person will be automatically enrolled in one selected by the state.
Medicaid recipients can "opt out" of Medicaid altogether and receive
subsidies to help pay the employee's share of the premium for
employer-sponsored health insurance. Such beneficiaries will have to
pay co-payments and deductibles like other employees in the same
health plan, even if the charges exceed normal Medicaid limits.
The state will deposit money into individual accounts for Medicaid
recipients who enroll in programs to lose weight, stop smoking and
live healthier lives.
Florida and the federal government will establish a pool of money
providing up to $1 billion a year to assist hospitals and other
health-care providers who treat large numbers of uninsured people.
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