Florida to Launch Model Medicaid Program

The U.S. Department of Health and Human Services (HHS) has announced their approval for Florida to launch an “unprecedented demonstration” Medicaid program starting in July 2006 reports the Senior Journal. The program will be phased in starting in Broward (Fort Lauderdale) and Duval (Jacksonville) counties with a statewide implementation to follow. The Florida program has been approved to operate until June 30, 2011.

The New York Times reports that the Florida 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 historical use of health care. The new program will make increased use of managed care and bring predicability to Medicaid spending and to reduce Medicaid’s rate of growth." The Senior Journal reports that Florida’s Medicaid spending has increased 13 percent for the previous six years and is expected to reach over $15 billion this year.

The traditional “defined benefit” plan will be changed a “defined contribution” plan in this program allowing Florida to set spending ceilings for recipients according to the New York Times. Those children under 21 years old and pregnant women will be exempt from these limits. The Senior Journal reports that, as part of the program, Florida and the federal government will contribute annually to a $1 billion fund established to assist hospitals and other “safety net” health car providers that care for uninsured people.


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“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,” Vernon K. Smith, a former Medicaid director in Michigan and current Medicaid consultant to many states, told the New York Times.

Under waivers to current Medicaid coverage, “a maximum per year benefit limit” will be established for each care recipient, allowing Florida to become a buyer rather than health care manager according to statements made by HHS Secretary Mike Leavitt in the New York Times.

The New York Times reports that Alan M. Levine, secretary of the Florida Agency for Health Care Administration, estimates no more than 5 percent of state Medicaid recipients will reach their annual limits. Leavitt responded to this point, “The health plan will still be responsible for providing services to the consumer, but the state’s reimbursement would be limited to that amount.”

The Senior Journal reports that the basic plan allows for Medicaid recipients to select from a group of state-approved managed care plans. These plans will compete for their business with the state. The plans will offer customized benefit packages above mandatory services set by federal law.

Benficiaries may also “opt-out” of Medicare altogether and accept subsidies to buy employer-sponsored insurance (ESI) reports The Senior Journal. This election will limit the care recipient to the benefits of their chosen plans. Indvidual counseling will be made available to those selecting ESI. These beneficiaries may also rejoin Medicaid up until 90 days after opting out.

Another feature of the Florida plan is the establishment of enhanced benefit accounts (EBAs) in order to promote healthy behaviors such as diabetes or weight management reports the Senior Journal. Beneficiaries can use funds accumulated in their EBAs for non-covered health-related needs such as over-the-counter meds. Individuals leaving the Medicaid program can use any remaining funds in the EBAs for up to three years for health-related uses as long as their incomes remain at or below 200 percent of the federal poverty level.

Medicare benficiaries will have 30 days to choose a plan or will be automatically enrolled in a state-selected plan based on a review of the enrollee’s “risk” or health status and historical use of health care services reports the Senior Journal.

“Introducing competition and consumer choice will improve quality of care and empower Florida’s 2.2 million Medicaid beneficiaries," Leavitt told the Senior Journal. "I commend Governor Bush for his leadership in transforming his state’s program.”

Leavitt continued in the Palm Beach Post as reported in the Senior Journal, “I believe it will be considered a milestone of national leadership in transforming his state’s program. The Florida demonstration will be a valuable part of our national conversation about reforming Medicaid to better serve the people in this country.”

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