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REFORMS IN S.C., FLORIDA
Choices improve Medicaid service
NINA OWCHARENKO
Sometimes it seems the motto in Congress should be, "Don't just do something, stand there!" Lawmakers debated a flurry of measures throughout December but ended up punting many issues into 2006. That includes Medicaid reform.
Luckily, two states decided not to wait for Washington to do something. Florida and South Carolina are both proposing reforms of their own Medicaid programs.
Most states recognize they can't afford their current Medicaid programs. Over the long haul, spiraling Medicaid costs will eventually squeeze out spending on other priorities - such as education, transportation and homeland security. In Florida, for example, 24 percent of the state's 2005 budget went to Medicaid. South Carolina's Medicaid program is expected to demand 24 percent of the state's budget by 2010. So both states are using existing waiver authority to test new approaches for Medicaid.
The specifics of each plan are different, but that's really the point. Both states aim to use different methods to make the Medicaid program more patient-centered rather than system-centered. They intend to introduce choice for beneficiaries, competition among providers and insurers and stability to the program. Similar principles already are found in the highly popular Federal Employees' Health Benefits Program, the system that provides health coverage to federal workers and members of Congress.
Choice is always good for consumers, in health care as in retail sales. Medicaid enrollees would be better off if they could select a plan that best suits their needs instead of depending on a one-size-fits-all system that leaves much to be desired. Choice will spur competition, as insurance plans and other providers of services will have to compete for enrollees based on value. By trusting in the free-market forces of choice and competition, states will reap the benefits of greater stability in the program.
To accomplish these goals, Florida and South Carolina want to establish a fair and equitable financing system based on individual needs and costs. Enrollees would be able to apply their Medicaid contribution to the plan they choose. The states also would focus on enhancing and improving coverage options.
To promote choice and competition, these states allow for flexibility in benefit structure. That sounds complex, but it really means allowing insurers and provider groups to design packages that enrollees actually want. Some plans may focus on diabetes while others may focus on pediatric care. In the end, most patients probably will get a plan that addresses their specific concerns.
Finally, these states will invest in educating Medicaid patients so they can make smart choices about their own health. Enrollees will be given the tools and information they need to make informed decisions about their health care and their health care services.
These states aren't the only ones looking for change. Governors from across the country and political spectrum stress the need for Medicaid reform. This puts them at odds with many of their party's elected officials in Washington, who seem to want to maintain the failing status quo.
The urgency for change in Medicaid is evident to those at the state level who are dealing with the program on a pragmatic level. Reform efforts like those in Florida and South Carolina are only the start.
As with welfare reform, it appears that the states - not Washington - will lead the way to reform.
Contact Owcharenko, senior health policy analyst in the Center for Health Policy Studies at The Heritage Foundation, at 214 Massachusetts Ave. N.E., Washington, DC 20002.
