Florida’s pro-taxpayer cure for Medicaid

Medicaid, the so-called health care safety net, is failing patients and failing taxpayers. But Florida is leading the way with a reform that works for everyone.

Recently, the National Governors Association reported that Medicaid is the largest line item in states’ budgets, consuming almost 1 of every 4 dollars. State Medicaid spending increased a jaw-dropping 20 percent in 2011 alone. Couple this fiscal nightmare with lagging patient health outcomes and satisfaction rates and it’s painfully clear Medicaid is in crisis.

But while other states struggle with a Medicaid crisis, Florida has found a Medicaid Cure.

A 2006 Medicaid reform pilot enacted under then-Governor Jeb Bush today operates in five Florida counties serving nearly 290,000 patients. The results prove Florida’s Medicaid Cure is both pro-patient and pro-taxpayer, and infuses the broken old Medicaid system with choice, competition, accountability and personal responsibility.

Imagine three different patients: a 28-year-old woman with diabetes, a 6-year-old girl with autism, and a middle-aged dad paralyzed from the waist down. With such diverse conditions you wouldn’t lump all three into one plan—ignoring their unique needs—and expect their health and quality of life to improve. Old Medicaid does. It forces all patients into just one or two plans.

Patient choice of plans

Florida’s Medicaid Cure is different. Depending on the county of residence, patients can choose from up to 11 different plans. All plans offer old Medicaid’s core benefits, but most also cover extras like additional adult hearing and dental benefits. One plan geared toward expectant and new moms even covers home-delivered meals for families of newborns.

This power of choice is important. Because patients can switch plans every year, plans compete to attract new enrollees and keep the ones they have. This means plans prioritize customer service, innovate, maintain access to specialists, and continuously improve to attract patients’ business. If expectations and access to care are not met plans lose patients, and then lose revenue. It’s the free market at work.

Florida’s Medicaid Cure funding structure aligns health with profit and holds plans accountable. Unlike old Medicaid fee-for-service, the Medicaid Cure provides plans with greater funding for enrolling sick patients, and lets them make more money if patients’ health improves. The Medicaid Cure ties a plan’s fiscal performance to patient health, just like payment to a private sector business is tied to its results.

Patients, too, are incentivized to become accountable for their own health. Medicaid Cure patients who get check-ups and manage their health can earn up to $125 per year and can use these funds for things like over-the-counter medications. Since the Medicaid Cure was enacted, patients have been offered more than $31 million in healthy behavior incentives. About 2 of every 3 patients participate in this rewards program.

Healthier, happier patients

Florida’s Medicaid Cure has more choices, access to specialists at or above the national average, and covers services not covered by any other Medicaid program in the country. But does it make patients healthier and happier? You bet.

Medicaid Cure patients rate better than patients trapped in old Medicaid in nearly two-thirds of national health categories. And Medicaid Cure patients report higher satisfaction rates in 83 percent of satisfaction measures compared to patients in both old Medicaid and commercial HMOs.

The Medicaid Cure makes patients healthier and happier through choice, competition, accountability and personal responsibility. It is saving patients’ lives. But is it saving budgets?

Florida taxpayers have saved an estimated $118 million annually since the five-county pilot began. When the federal government green-lights the Cure for statewide expansion, taxpayers here are expected to save almost $1 billion every year. And if the Medicaid Cure was replicated in every state, not only would Medicaid patients across the country be healthier and happier, American taxpayers would save more than $1 trillion over the next decade.

States looking to improve patient health and save taxpayer dollars should embrace Florida’s Medicaid Cure. Through free market principles it has transformed old Medicaid to become pro-patient and pro-taxpayer.