Medicaid cost caps called 'risky'

Policy experts who looked at the governor's proposed changes in the system urge caution.

By ALISA ULFERTS
Published July 13, 2004

ORLANDO - Hundreds of lives and billions of dollars will be risked if Florida rushes into an overhaul of its public health care program for the poor, health policy experts warned Monday.

The warnings fell on the anxious ears of 300 health care providers, educators and advocates who gathered in Central Florida to discuss Gov. Jeb Bush's plans to rework Medicaid.

The state-federal program gobbles one of every four dollars the state spends, squeezing other programs like education and juvenile justice. Bush has suggested capping federal Medicaid spending in Florida so the state can better predict its costs. He proposes doing it in five-year blocks.

But that would end federal guarantees.

"Would you be willing to create a budget for your health care needs for your family, that you couldn't get out of, for five years? That would be a pretty risky decision for you to make today," said Alan Weil of the Urban Institute, a nonprofit research institute in Washington, D.C.

Joan Alker of the Georgetown University Health Policy Institute has studied the prospects for a Medicaid block grant program in Florida and says the state could be on the hook for billions of dollars if it underestimates costs or is hit with an epidemic.

Under a block grant system, federal Medicaid money would be capped at what the state predicts it will cost to run Medicaid for five years. If actual costs exceed predictions by just 1 percent, the cost to the state is $1.6-billion in federal funds, Alker said.

If the state underestimates both costs and enrollment growth by 1 percent, it loses $3.38-billion over that same time. Yet the state still must cover those costs or cut the program.

"Mistakes can be very costly," Alker said.

But Alan Levine, who heads the state Agency for Health Care Administration and oversees the state's Medicaid program, assured the audience his office is far from deciding any specific changes.

"All we have proposed is bringing predictability to the growth. I don't think that's unreasonable," Levine said.

Still, Levine warned that change was inevitable in a program that is growing beyond its ability to be sustained and isn't serving patients well anyway. Florida's Medicaid program has doubled its budget in the past six years. "We're spending more than we've ever spent before, but we have children with rotting teeth, we have child checkups that aren't being done. . . . Reform has already begun, and those who are advocating doing nothing have missed that boat," Levine said.

Though they disagreed on the specific causes for Florida's mushrooming Medicaid costs, experts on Monday were unanimous in their warning to the state officials in the room: Be open, upfront and cautious in your Medicaid changes.

"Typically, these negotiations are very secret," Alker said. Other states that initially enacted Medicaid changes behind closed doors were subsequently forced by state lawmakers to reverse some of the changes, Alker said.

One of the reasons for Monday's symposium, organized by several groups including the Florida Hospital Association, was that people who serve Medicaid patients said they weren't getting enough information about Bush's plans. Legislative leaders nearly gave Bush the authority to bypass state laws requiring public notification of Medicaid changes this spring, but changed their minds at the last minute.

Levine has promised openness. Bush plans to submit a plan to the federal government for approval this fall, and then to the Legislature next spring. Both must agree before the change take effect.

But Rep. Eleanor Sobel, D-Hollywood, who sits on three health care committees in the Florida House, said she thinks Bush should take another year.

"I think what I learned is we have to proceed with caution," Sobel said.

[Last modified July 12, 2004, 23:51:21]