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For a better Florida

Medicaid in crisis

By Alisa Ulferts
Published February 27, 2005

	Previous coverage: Board exams Seven-year itch Those pesky amendments
	FLORIDA BY THE NUMBERS Population 9,664,000 (April 1, 1980 Census Count) 10,881,000 (July 1, 1984 Estimate) 15,982,400 (April 1, 2000 Census) 16,713,000 (July 1, 2002 Estimate) State Budget Total Expenditure: $22,561,516,000 (1983-84) $50,264,767,000 (2001) Total Revenue: $25,072,670,000 (1983-84) $46,370,565,000 (2001) Housing Total Housing Units 4,378,691 (April 1, 1980) Total Housing Units 7,303,000 (April 1, 2000) Total Mobile Home Tags Sold 483,057 (Fiscal year 1983-84) 477,871 (Fiscal year 2001-02) Median Family Income $24,580 (1983) $56,824 (2001) High School Graduates 92,877 (1983-84) 119,233 (2001-02) Total Motor Vehicle Tags 12,217,699 (Fiscal Year 1983-84) 16,712,548 (Fiscal Year 2001-02) Total Mileage of public roads and streets 93,074 (1983) 117,300 (2001) Building Permits--Single-Family Housing Units 97,301 (1984) 128,298 (2002) Fish and Shellfish--Total Pounds Landed 193,257,711 (1982) 97,646,894 (2002)

TALLAHASSEE - Megan Holl can't walk, talk or feed herself. The Longwood resident spends most of her day in a wheelchair, except for the few hours when she is lifted out to crawl around the floor for exercise.

Holl is 18 and suffers from a severe seizure disorder that has left her with the mental capacity of an 18-month-old. She also is No. 5,812 on the Medicaid waiting list for developmentally disabled services. Another 15,000 people are waiting for those services, too.

Ordinarily, Holl wouldn't have to wait for care. But the federal government doesn't require Florida to pay for the treatment she needs.

That saves Florida money and gives it more flexibility, but it means people like Holl don't get the medical services they need but can't afford.

Florida's Medicaid patients aren't alone.

For the first time, states will collectively spend more money this year on Medicaid than education. The federal-state health care program for the poor has exploded in recent years, a result of increasing medical costs and decreasing private insurance.

In Florida, the program has more than doubled in the past six years to nearly $15-billion, gobbling one-fourth of the state budget.

So Florida and other states have asked the federal government for waivers to allow them to not cover certain procedures. That saves money and expands coverage for less costly procedures, though it doesn't help people like Holl.

But it appears to be the future of Medicaid. President Bush wants to cut $60-billion in federal spending from the $300-billion program over the next decade.

"Do we want to give everyone Chevys, or a few people Cadillacs?" U.S. Health and Human Services Secretary Mike Leavitt said recently in congressional testimony and to reporters.

Leavitt is urging states to apply for waivers, which would save states money and cut the federal government's costs. States also could continue Medicaid's traditional programs, but with less help from Washington.

Many states say they can barely afford to keep Medicaid as a traditional entitlement if they rely on the federal money they get now. Less money from Washington likely means more waivers, more waiting lists - or no coverage at all.

That worries Holl's parents, who say the four years their daughter has waited for help have been agony.

"In a sense, Betsy and I have become disabled as well," Rob Holl said of himself and his wife. "We have been dramatically affected - socially, psychologically and even professionally."

America's health care landscape was far different in 1965, when Congress created Medicaid. Simple doctor visits, hospitalization and skilled nursing services accounted for most of the health care people used at the time.

As health care practices evolved, states kept up by adding services that were not required under original federal Medicaid rules, such as prescription drug coverage and outpatient procedures. Unless they got a waiver, states had to offer the additional care to everyone who qualified.

These optional programs, which reflect more expensive advances in treatment, are behind much of Medicaid's cost explosion in recent years. In many states, including Florida, optional programs account for more spending than the so-called mandatory services contained in the original 1965 Medicaid plan.

Plus, as more people lost their jobs during the recent recession - or lost their job-related health insurance - Medicaid was there to catch many of them.

The result for states was several years of double-digit percentage increases in Medicaid costs, which only recently have begun to slow down.

"Florida's Medicaid system will collapse under its own weight if we do not fundamentally transform the way it operates," Gov. Jeb Bush said last month when he unveiled his proposal to revamp the program.

Of the states' plans to restructure and contain Medicaid, Bush's proposal is one of the boldest.

Rather than paying doctors and hospitals directly for treating Medicaid patients, Bush wants the state to pay HMOs and other health networks to cover the cost of caring for the 2.3-million people enrolled in Medicaid.

To entice insurance companies to take on some of Florida's sickest, poorest residents, the state would cap Medicaid benefits, just as private insurance plans do. That would ease some of the financial risk for insurance companies.

Patients requiring more care would be covered by a catastrophic fund financed through a percentage of Medicaid premiums.

Bush has called his plan a "framework" and said he is relying on health care professionals to flesh it out. The proposal calls for managed care companies and other networks to design the plans Medicaid patients would use, and it is at least a year away from becoming a reality.

State lawmakers and federal regulators must sign off on the plan, which requires a waiver and cap on federal reimbursement.

Bush has said tailoring health plans to fit Medicaid patients' individual needs, combined with the efficiency that private health networks offer, will free money to expand basic coverage. He has even proposed subsidizing employer-sponsored, primary care health plan premiums with Medicaid dollars for low-income workers.

This would give patients more options than the state's one-size-fits-all program, Bush said. "The paternalistic approach isn't working," he said.

Since 2001, when Congress passed the Health Insurance Flexibility Act, states have been allowed to use the money they save with waivers to offer bare-bones coverage to more people, many of whom wouldn't qualify for regular Medicaid. The law also allowed states to subsidize private health insurance plans using Medicaid dollars.

States that have taken advantage of the law, including Utah when Leavitt was governor there, have seen mixed results. The Henry J. Kaiser Family Foundation, a nonprofit research group in California that tracks health care trends, recently published a report saying patients in some of those states were left with health plans that are far inferior to the breadth of coverage offered under traditional Medicaid.

"Some states with premium assistance waiver programs have been allowed to use Medicaid . . . funds to finance insurance plans available in the private market, even if the scope of benefits is considerably below federal standards or the cost-sharing requirements are well above the limits imposed by federal law," the foundation wrote.

In Utah, Leavitt used a waiver to cover primary care for some previously uncovered low-income people, as well as some regular Medicaid patients. Even though the new program didn't cover inpatient treatments or prescription drugs, it soon reached its federal budget cap. The program has been closed to new patients for more than a year. New patients are tracked on a waiting list.

Oregon tried a similar approach: It got a waiver to limit some extensive, expensive treatments and use Medicaid dollars to subsidize basic coverage premiums for more people - with similar results.

And Tennessee recently cut 330,000 people from its Medicaid program, after it tried to expand primary care Medicaid services to its uninsured. About 25 percent of the state's population qualified for the Medicaid waiver, and the state soon ran into deficits. Rather than impose waiting lists, Gov. Phil Bredesen chose to cut Tennesseans from the system.

Those states' experiences have some Florida lawmakers wondering what "basic coverage" would look like here. They have heard the governor say repeatedly that health coverage, including Medicaid, should be used only for catastrophic illnesses and accidents, as it was 30 years ago.

This, Democratic lawmakers note with irony, is in the name of "modernizing" Medicaid.

"We can't go in there and take those programs away from people," even if doing so could expand bare-bones coverage to more of the state's uninsured, said Senate Democratic Leader Les Miller, D-Tampa. "What we need to do is make sure people who need Medicaid the most get it," he said.

Republican Sen. Dennis Jones of Treasure Island, a chiropractor who treats Medicaid patients, said 28 states have higher federal reimbursement rates than Florida's. The state ought to try to get more federal money before it scales back Medicaid services, he said. For every dollar Florida spends on Medicaid, it is reimbursed just 59 cents by Washington. Other Southeastern states are reimbursed as much as 77 cents on the dollar. The reimbursement rate is based on state demographics.

"If we've got a friend in the White House, I think the governor would do well to get Washington to jack up our 59 percent to 67 or 70," Jones said. "Yes, we have some rich people in Palm Beach, but we have people in need all over the state."

Any plan that reduces benefits, increases copays or institutes waiting lists is out of touch with the lives of people who rely on Medicaid, Jones said. Many don't even have telephone service, he said.

"This is about the farthest thing from reality from those who can't relate to those without means," Jones said.

[Last modified February 27, 2005, 00:13:19]