The governor says if left unchecked, the program will swallow the state's budget. Critics contend the needy will lose their coverage.
By ALISA ULFERTS
Published February 22, 2004
TALLAHASSEE - Gov. Jeb Bush soon will dispatch a cadre of health care advisers to Washington to deliver a message: It's time to change Medicaid as we know it.
If Bush has his way, the 40-year-old national health care program for the poor no longer would be considered a government entitlement in Florida.
Instead, spending would be capped and some people who need health care coverage could no longer count on Medicaid.
It's a dramatic step, but one Bush says is needed to prevent Medicaid from gobbling up the state budget.
Florida spends almost $14-billion a year on Medicaid, and the cost increases each year.
"I'm frustrated by Medicaid," Bush recently told the St. Petersburg Times. "It grows by 10 percent per annum. We start the year - without any change in a service, and without any change in the trend line for the people who are qualified to receive it - a billion dollars in federal and state money in the hole."
Changing Medicaid is one of the governor's top priorities for the legislative session that begins March 2.
Spending on social services now eclipses education, and in 12 years, the state estimates Medicaid will cost $53-billion, equal to this year's entire state budget.
Rising prescription drug and nursing home costs are the main culprits, along with a sluggish economy that has the jobless scrambling to Medicaid for health care.
Bush's plan: Prove that states can better treat the poor and control health care spending when they are unshackled from federal regulations.
But opponents say easing federal regulation means Medicaid no longer would be an entitlement and spending would be subject to the financial whims of state lawmakers every year.
"Flexibility means we want to make it look like we are covering more people when we are not," said Karen Woodall, a social services advocate. "Medicaid is the last entitlement program, and this governor doesn't like that."
Federal law requires Florida to cover anyone who qualifies for Medicaid, whether the particular health care service is required by Washington or an optional one the state chooses to offer.
In Florida, Medicaid recipients are primarily children whose parents earn from 200 percent of the federal poverty level ($36,800 for a family of four) to 100 percent, depending on their age; pregnant women who earn up to 185 percent of poverty; Medicare recipients who earn less than 120 percent of the poverty level; and people with catastrophic illnesses that would put them well below the poverty level if they paid all their medical bills themselves.
Bush wants a new system that encourages what he calls personal responsibility by promoting preventive care and increasing out-of pocket costs for Medicaid recipients.
He wants Florida to be free from federal requirements to cover specific health care services, and he wants the state to be able to subsidize private insurance for those Medicaid patients who have access to it but can't afford it.
"We recommend moving away from entitlement without responsibility and encourage the recognition of the capabilities of beneficiaries," Bush testified last year in Washington before a subcommittee of the House Committee on Energy and Commerce.
To get what he wants, the governor will need the approval of his brother's administration in Washington and the Florida Legislature.
"We must resolve not merely to tweak an old system," Bush told the House committee. "We must seize the opportunity to create a new system that honors the original vision of Medicaid while also recognizing that our society and health care system have changed dramatically over the 38 years since its inception."
So what would Medicaid look like if the governor succeeds?
Bush points to KidCare, which encompasses a half-dozen health care programs for children of the working poor.
In these programs, families who don't qualify for Medicaid can buy into a government-subsidized insurance program with monthly premiums and copays. The extra cost is designed to encourage preventive care to avoid more costly treatments. It's cheaper for the families and for the state.
The political pitfall of such an approach has been playing out in recent months as 100,000 kids wait to join the KidCare program because the Legislature capped funding last year.
A bill working its way through legislative committees would use a one-time infusion of federal cash to get those children into KidCare. But lawmakers also want to eliminate the political pressure a waiting list creates by not keeping a list.
Instead, families would have two chances a year to sign up.
Families who have access to insurance through their work would not qualify, no matter how much private coverage costs. When the state money runs out, kids who didn't get in would have to wait six months to try again.
That worries Wakulla County resident Stacy Justice, whose three children are covered under KidCare.
Justice's 8-year-old middle son, A.J., has severe Attention Deficit Hyperactivity Disorder and needs medicine and therapy to function in school. But the Justices can't afford the health insurance James Justice's company offers on his $20,000 annual pay.
If the KidCare bill becomes law, and if the rest of Medicaid were to look more like it, Justice said she would lose all of her treatment options for her son.
"He wouldn't be able to function without them," Justice said.
Bush wants the KidCare bill passed the first week of the legislative session. Democrats in both chambers vow to fight, but the bill has the support of Senate President Jim King and House Speaker Johnnie Byrd.
Anne Swerlick, a lawyer who has represented Medicaid patients in disputes with the state, worries what might happen if all of Medicaid looked like KidCare.
"I think it completely unravels the safety net," said Swerlick, who works for Florida Legal Services.
"When people say we don't want an entitlement program, that means when times are really tough, like they are now, there's no guarantee of coverage," Swerlick said.
Bob Sharpe is sympathetic. As the state official in charge of Medicaid, Sharpe said he doesn't want anyone who needs help to go without. But he said Medicaid has doubled in size in just six years and it's only a matter of time before it implodes. Medicaid in Florida is expected to cost almost $14-billion in 2004, double what it cost in 1998.
"Financially, this program is not something that can be sustained in the long run," Sharpe said. "It's an unworkable formula."
Sharpe is deep in discussions with the federal Centers for Medicare and Medicaid Services to see how much of Bush's plan can be achieved without changing federal law. The idea is to use federal waivers to get around as many federal regulations as needed. Waivers are normally a time-consuming process, but Bush's plan appears to be on a fast track with federal health officials.
Florida already has some waivers that social service advocates say have helped people. One allows people who would have to stay in a nursing home to take those dollars and hire the help they need to stay at home. For many people it's cheaper to stay at home than in a nursing home, so the state saves money and can serve more people. But because such waivers are intended to allow states to experiment, the number of people who can enroll is limited.
Bush has an ally for expanding Florida's waivers in Washington: His brother also wants to curb the size and scope of Medicaid.
Last year, the president suggested allowing states to scrap many federal regulations and design their own programs. In exchange, the federal government would cap funding to the states by switching from a formula that matched state dollars to lump sums.
Gov. Bush lobbied hard for that proposal, which his brother dropped after many governors said it was too risky and the Medicare drug benefit took center stage.
- Times researcher Deirdre Morrow contributed to this report.
