A Closer Look at Florida’s Medicaid Program

The Florida legislature is in the midst of a hot and heavy debate about the future of the state’s Medicaid program. One of the key questions being discussed is whether or not to expand the state’s controversial Section 1115 Medicaid waiver across the state and across all populations. The waiver is coming to the end of its five-year approval period on June 30, 2011.

Along with my colleague at the Georgetown Health Policy Institute, Research Professor Jack Hoadley, I conducted a thorough evaluation of the first two years of Florida’s Medicaid changes as they were implemented in Broward, Duval and surrounding counties.  Our research found troubling signs – providers leaving the Medicaid program, no evidence that the changes were saving money, and concerns about access to needed prescription drugs and more.

Our funder for the project, the Jessie Ball duPont Fund based in Jacksonville, Florida, asked us to come back and do an update on where things stand as the federal government considers whether or not to extend the waiver. And, because Florida is also in the midst of a highly politicized discussion about the impact of health care reform, we also looked at the impact of the Affordable Care Act on Florida’s Medicaid health reform program.

Last week, the Florida House approved by a large margin a bill that would expand the waiver statewide and extend it to all populations including those using long- term care services.  Watching the debate, I was struck by the questionable assumptions many legislators were basing their support on – most prominently that turning Medicaid over to managed care companies with unprecedented flexibility would save money and assure higher quality care for beneficiaries. Medicaid is less expensive than private insurance and Florida,(according to the state’s own data) has actually seen costs go down on a per-person basis, while private insurance costs have been rising steadily. Overall Florida’s Medicaid costs have been going up because enrollment has increased significantly due to the recession – hopefully with improved economic times ahead that trend will slow down.

Our findings show that there is no clear evidence that the waiver has been saving money.  We also found that there has been significant turmoil in the market which likely has resulted in diminished access to needed services. Beneficiaries have turned to non-capitated Provider Sponsored Networks in growing numbers. And certain features of the waiver, such as the “Opt-Out” premium assistance component, have clearly been unsuccessful – with only 21 persons currently enrolled and high administrative costs. Yet many in the legislature want to expand this approach.

With respect to the impact of health reform, again questionable assumptions abound. The state’s estimate of what the Affordable Care Act will cost them is substantially inflated because of flawed thinking – most notably the state assumes 100% participation of new and current eligibles post expansion of Medicaid in 2014 – a feat never achieved in Medicare or Medicaid history in any state in the country. This assumption is even more ridiculous because Florida is not an over-achiever in this regard today – with kids participating at lower rates than the US average as well as every neighboring Southern state. Whereas the state says the ACA will cost them $6 billion over a six-year period, we believe a more realistic set of assumptions results in a range of a possible state cost of up to $1 billion over six years but could even result in savings as high as $3 billion to the state over the same time period.

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Joan Alker
Joan Alker is the Executive Director of the Center for Children and Families