Florida Medicaid overhaul gets federal OK

State officials say defined contribution will help them keep costs down.

By Joel B. Finkelstein, AMNews correspondent. Nov. 7, 2005.

Washington -- Florida has received federal approval to restructure its Medicaid program by shifting most of the state's 2.2 million beneficiaries into managed care plans through a defined-contribution system.

Pending final approval by the state Legislature, a pilot program affecting about 210,000 residents is scheduled to launch in July 2006, later followed by statewide rollout.

Gov. Jeb Bush hailed the federal approval, which occurred Oct. 19, as an important step toward making the program sustainable. "By overhauling Medicaid, Florida is creating a system that empowers patients and expands access to best serve our most vulnerable citizens for years to come," he said. A $15-billion program, Florida Medicaid could consume $50 billion -- nearly 60% of the state's budget -- by 2015 if left unchanged.

Under the waiver, the state would offer patients a lump sum that they could use to buy coverage from an approved managed care plan or from an employer. The defined-contribution arrangement should give the state more budget predictability, says the Florida Agency for Health Care Administration.

Recognizing that the dramatic growth in Medicaid spending over the past few years is unsustainable over the long run, Florida's physicians are working with the state, said Francie Plendl, government affairs director for the Florida Medical Assn.