As Virginia gears up for a special session next month to reform the state’s Medicaid program, legislators should take note of the success in Florida. First signed into law in 2005 under Governor Jeb Bush, Florida’s five pilot counties for Medicaid reform saved taxpayers over $100 million annually. In 2011, Governor Rick Scott signed into law a statewide expansion of that pilot program where savings could reach nearly $2 billion annually.
The pilot program in Florida shifted the risk of abuse from the taxpayer to the private market by replacing fee-for-service with premiums. Patients saw predictable rates and chose between Health Maintenance Organizations (HMOs) and Provider Service Networks (PSNs). PSNs are owned by doctor groups or non-profits rather than insurers. While both resulted in lower expenditures for the reform program counties, with reduced costs by 18 percent, those with a PSN saved on average an additional $7 more per month.
In the pilot counties, patients could choose between two and 16 different plans. This lowered monthly expenditure for the elderly and disabled by $200 and $30 a month for mothers and children. The reform program also provided incentives of up to $125 a year for healthy behaviors.
Besides saving the taxpayer millions of dollars, Florida’s Medicaid reform lead to higher patient satisfaction across the board. 100 percent of patients with PSNs were at or above the national benchmark in satisfaction.
With one-third of the 2011-2012 Florida state budget spent on Medicaid, eliminating abuse and saving taxpayer dollars was a must. The 2011 reform expanded these cost effective solutions statewide, just as Virginia should do next month. Florida was divided into 11 regions with multiple care organizations to choose from. A low-income pool was created as well as tort reform, capping practitioner liability at $200,000.
Currently 300.000 Floridians are under the Medicaid reform system with 2.9 million expected to enroll. Because of these reforms, Florida is estimated to save between $500 million and $1.9 billion annually. Virginia legislators should build off of Florida’s accomplishment when drafting Medicaid reform next month.
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