Medicaid reform program in Florida allows a choice of health care plans
HHS has approved an innovative Medicaid reform program allowing Floridians to choose health care plans that best suit their needs, bringing competition and consumer choice into Medicaid for the first time.
"Introducing competition and consumer choice will improve quality of care and empower Florida's 2.2 million Medicaid beneficiaries," said HHS Secretary Mike Leavitt. "I commend Gov. Bush for his leadership in transforming the state's program."
Enrollees will play a more active role in deciding how they will receive health care by selecting from a group of state-approved managed care plans that will compete for the business. They will have up to 30 days to choose a health plan. If none is chosen, the beneficiary will be automatically enrolled in a state-selected plan.
Unsustainable rate
Florida officials had determined their Medicaid growth rate of 13% a year for the past six years was unsustainable. In 2005, for example, Medicaid spending is expected to take 25% of the state's budget, more than $15 billion a year. State officials said that under the §1115 waiver demonstration, the state can maintain a reasonable rate of growth while providing enrollees access to improved quality health care services.
Beneficiaries will be able to choose a managed care plan with a benefits package that best suits their needs. The demonstration will allow plans to customize benefits packages, although each plan must cover all mandatory services detailed in federal law. Plans may enhance their benefits packages in an effort to attract more enrollees.
In addition to a choice of plans, beneficiaries also have for the first time an opportunity to opt out of Medicaid altogether and receive subsidies for their share of the cost to purchase employer-sponsored insurance.
Beneficiaries who choose employer-sponsored coverage will be entitled only to the benefits covered by that plan as well as to any cost-sharing requirements, even if they exceed normal Medicaid limits. Beneficiaries considering switching to an available employer plan will be offered individualized counseling about its potential benefits and risks. Opting out is voluntary, and beneficiaries may choose to rejoin Medicaid within 90 days of opting out.
New incentives
Another new feature of the Florida demonstration is establishment of the enhanced benefit account (EBA) program, with direct incentives to Florida demonstration enrollees who participate in state-defined activities that promote healthy behaviors such as weight management, smoking cessation, and diabetes management.
Beneficiaries will be allowed to accumulate funds in their EBA and use them for noncovered health-related needs such as over-the-counter medications. Those who leave Medicaid can use any funds remaining in their EBA account for health-related uses for up to three years as long as their incomes remain at or below 200% of the federal poverty level.
Paying providers
The demonstration will establish a $1 billion fund annually to help the state pay safety net providers caring for the uninsured.
The state begins this demonstration in Broward and Duval counties in July 2006, with statewide implementation following. The demonstration runs through June 30, 2011.
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