Florida Medicaid Reform; One Year’s Progress
Florida's Medicaid reform demonstration is entering into its second year. Now operating in five counties, the reform has unambiguously led to greater competition. Many plans now offer more services and products than conventional Medicaid. There are also a variety of benefit packages. The most popular expanded benefits include over-the-counter drugs and adult preventative dental care.
A measure of success of this program is the percentage of new beneficiaries who have selected a plan (67%) as opposed to auto assignment. The rate was 62% in the second quarter, 66% in the third quarter and close to 75% in the fourth quarter. Extrapolation of the first-year trend by quarter indicates a possibility of meeting the 80% target for year two.
To encourage healthy behavior (such as reducing obesity), beneficiaries are given enhanced benefit accounts (a reverse Health Savings Account), which allows them to earn spendable dollars by changing behaviors. At the end of the first year, enrollees had earned more than $4.3 million in credits with close to half of the reform population having undertaken at least one healthy behavior. Beneficiaries have been slow to use their credits, however. So far they have spent only about $150,000 of earned credits.
A major disappointment of the reform is that fewer than 10 beneficiaries are using the actuarial value of their benefit to buy into an employer-sponsored plan.
For the overall program, the budgeted amount in year one was $328 per capita. The actual expense was $282. Instead of a growth rate of 8% per year, spending actually declined by 7.2%. In addition, the reform established a "low income pool" to distribute $966 million dollars per year to safety net providers and other groups serving Medicaid, the uninsured and underinsured populations.
For the future, risk-adjusted capitated payments will be paid to the health plans to provide an incentive for innovative providers to develop niche products for those with significant health problems. "Special needs" plans will seek to enroll the sick rather than shun them. There will likely be groups of specialists working together to coordinate the care needed to properly and cost effectively treat patients with multiple chronic illnesses.
There is little evidence that primary care physicians are leaving the program. The non-renewal rate is only 3% in the two initial reform counties. Extremely limited data available on selected specialists in the program does not indicate a problem there either.
An important goal of reform is to increase the quality of the medical care and health outcomes in Medicaid. Data is not yet available on changes in health status of beneficiaries.
Very interesting. Is there a plan to expand the program and scale it up to encompass more consumers in more counties? Is there a larger plan for the demonstration? It seems like the data on the health status of the participants will be very telling and could very well effect the desire to grow the plan even larger. Outcomes speak louder than words, I imagine.
A question for you: Why couldn't the federal government allow doctors to deduct the charity care they perform on the indigent from their income tax, using some sort of pre-determined Medicaid-style rate? In this way, the doctors would have the incentive to provide more indigent/uninsured care. The down side would be less tax revenue from the doctors. But, the government would be subtracting tax revenue at the "retail" rate, while getting indigent care at the "wholesale" rate, which should put them ahead in the long run. Also, there would have to be some guidelines as to the definition of indigent, otherwise no one would bother to get insurance, but these should be fairly well-defined income levels.
Thank you for your good work.
This is great.
Sounds like an old record, “free care is worth exactly what you pay for it”. Can Medicaid in Florida reimburse physicians in an equitable manner? My Medicaid reimbursement for patients I saw at UT Southwestern was ludicrous. Fortunately my faculty salary kept me from food stamps.
Very interesting. Is there a plan to expand the program and scale it up to encompass more consumers in more counties? Is there a larger plan for the demonstration? It seems like the data on the health status of the participants will be very telling and could very well effect the desire to grow the plan even larger. Outcomes speak louder than words, I imagine.