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Move slowly on Medicaid

Legislators should be wary of the governor's plan to cap Medicaid costs, which gives too much control to private managed-care networks.

Gov. Jeb Bush's proposal to essentially outsource Medicaid to private managed care networks is bolder than any other state's effort to slow the soaring cost of the health care program for the poor. Yet nearly halfway through the legislative session, countless practical and philosophical questions need further discussion. That's why legislative leaders are smart to move slowly. They should not endorse such fundamental changes in an essential entitlement without more time to consider the consequences.

The federal government and nearly every state are struggling to figure out how to control Medicaid costs, and government cannot absorb such enormous spending increases forever. Medicaid spending in Florida has more than doubled since 1999 and will exceed $14-billion this year, nearly a quarter of the entire state budget. Bush deserves credit for forcing the Legislature to focus on the problem and offering his own plan, but it is a plan with too many pitfalls.

The governor would cap the state's Medicaid costs by paying premiums to managed care networks to care for patients. While the state would not limit enrollment in Medicaid, it would set aside a specific amount of money for each patient and cap benefits. Health maintenance organizations and other health care networks would offer various plans with different levels of coverage. But those HMOs and health care providers are driven by profit, and the state effectively would be empowering them to ration health care to control costs. That's giving away too much control to save money, and the state would be in no position to negotiate if the private networks insisted on more concessions or threatened to walk away.

More than 750,000 Medicaid patients already are enrolled in HMOs, and 1.5-million of 2.2-million patients are enrolled in some form of managed care. So Bush is counting heavily on capping costs and competition to save money. Florida already has been burned by privatization in many areas, from prison food services to human resources, and legislators should be skeptical about applying the concepts that got the state into those messes to Medicaid.

With too little time to analyze the ramifications of Bush's plan or develop a comprehensive alternative, Republican legislators are tempted to throw the governor something he can count as a victory. They could endorse Bush's move to seek the federal waivers needed to experiment with Medicaid and support a couple of experiments in parts of the state. But they should proceed cautiously even here, because the Legislature has to preserve the authority to make changes even after Washington approves the details.

There are many options for better controlling costs on Medicaid, including cracking down on fraud, expanding existing managed care plans and developing alternatives that rely less on the false promises of privatization. It is more important for legislators to get it done right than to get it all done now.

[Last modified March 31, 2005, 01:27:20]