Florida Legislature 2005 (click for ongoing coverage)

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Dramatic proposal, cautious response

Gov. Bush's Medicaid overhaul became a pilot project, thanks to lawmakers "unwilling to experiment with the poor."

By ALISA ULFERTS
Published May 8, 2005

TALLAHASSEE - Gov. Jeb Bush unveiled his dramatic proposal to revamp Medicaid before a room overflowing with health care lobbyists.

It was the most expansive, radical restructuring of the 40-year-old health safety net in the country.

Bush would replace Medicaid with a managed care system similar to private insurance. Patients' benefits would be capped, just like in private health plans. Federal money would be capped, too. Spending would be cut by $2.3-billion. And Medicaid's runaway costs would stabilize.

"Florida's Medicaid system will collapse under its own weight if we do not fundamentally transform the way it operates," Bush said when he announced the proposal four months ago.

But lawmakers balked.

They called his proposed cuts draconian and restored most of them to the budget. They held public hearings around the state where criticism poured out.

In the end, lawmakers approved only a modest pilot project in Broward and Duval counties. In a last-minute concession to Bush, they agreed to let the pilots expand to other parts of the state after two years - but only with their approval.

They said Bush wanted too much, too soon, with too many lives at stake.

"I am unwilling to experiment with the poor and experiment with the sick," said Sen. Rod Smith, D-Alachua.

When Bush first began talking about Medicaid changes almost two years ago, lawmakers gave him the authority to seek federal approval without even knowing what he wanted to do. They trusted him.

Then they went on the road and listened to patients with lung disease, spinal cord injuries and organ transplants describe how their lives depended on the program that was costing the state so much.

What worried lawmakers the most was what could happen when a private company instead of the state determined what care a patient got. Rather than paying doctors and hospitals directly for treating Medicaid patients, Bush wanted the state to pay health maintenance organizations and other health networks a premium to manage patients' care.

He was essentially proposing the biggest privatization initiative yet.

The health networks would decide which services to cover. The HMOs could offer extra services to attract Medicaid patients.

But what would happen when a patient showed up at an emergency room asking for a service the HMO refused? Would the state pay for that, or would the hospital have to absorb the cost? Bush didn't have an answer. From the start he called his plan a "framework" and wanted the industry to flesh it out.

"I've gotten thousands of e-mails asking me questions," Sen. Jim King, R-Jacksonville, told senators Friday. Part of King's district is in Duval County, where one pilot project will be based.

So the House and Senate went to work on their own plans. Both involved pilot projects with managed care companies, so the bills fell far short of Bush's sweeping proposal. Bush favored the House plan because it would have allowed an accelerated statewide phase-in of the changes.

For weeks, neither side seemed willing to compromise.

In the final hours Friday, long after most health care lobbyists had written off any chance of a Medicaid bill passing, a deal was forged. The Legislature would pass the Senate bill, but add a sentence allowing the state Agency for Health Care Administration to eventually expand the pilot projects statewide with legislative approval.

Sen. Dennis Jones, R-Treasure Island, cast the lone no vote in the Senate. (The House approved it 88-24). Jones, a chiropractor who treats Medicaid patients, said the state should first try to get more federal Medicaid money. Fifty-nine percent of Florida's Medicaid budget is federal money.

Bush declared victory. The bill "commits the Legislature to a statewide plan, which is what we were looking for," he said.

Alan Levine, who heads the Agency for Health Care Administration, said the legislation will "send a signal to Washington that Florida is serious about Medicaid reform." Besides, he added, "Broward and Duval counties are bigger than some states."

As the 2005 session began to wind down, the political spin over Medicaid began. Legislative leaders said Bush didn't really need their approval to move forward with his proposed changes. And they still have next year to pass a bill, though Bush's negotiating clout could be seriously eroded in his final year in office.

"Absent a bill, he can still go make a run at getting a waiver," Senate President Tom Lee, R-Brandon, said last week. The federal government has to approve any changes to Medicaid.

Rep. Holly Benson, the Pensacola Republican in charge of the bill in the House, agreed that Medicaid changes would not live or die by the passage of a bill.

"But as policymakers, we just thought we ought to be involved in the framing of the policy," Benson said.

The Senate plan includes further restrictions on prescriptions, oversight of doctors whose practices appear outside the norm and thus more expensive, and allows the state to increase what it spends in parts of Medicaid if that translates into savings for other parts of the program. Patients in the pilot areas can use their Medicaid premium to subsidize their employer coverage, if they have it. The plan requires public notification for every change requiring federal approval.

But it won't save the state any money, at least not for a while. The drug program will shave an estimated $292-million. But even with those savings, it still will cost the state about $3.2-million to implement the pilot projects the year after next. Real savings won't materialize for a couple of years. But that's better than getting too far down a path that might not work, senators said.

"If this is the wrong direction, then we'll know it before it's too late," said Sen. Nan Rich, D-Sunrise.

[Last modified May 8, 2005, 00:45:19]