Drowning In Choices
Under Florida's newly approved waiver, Medicaid patients will have to slog through all the fine print that is a health insurance plan.
Jeb Bush is pro-choice in at least one way: Florida's governor believes in giving Medicaid recipients plenty of options to choose a health plan that will best serve their needs. Under a waiver approved by the federal Centers for Medicaid and Medicare Services in October, Bush will begin turning the state's Medicaid program into a mirror image of the private sector. His ideas are, perhaps, the most radical "reform" of the 40-year-old program to come to CMS's attention.
Florida's waiver would give Medicaid beneficiaries what is, in essence, a voucher to go out and buy a health plan. The amount of that voucher--effectively the insurance premium--would be set according to the Medicaid patient's health status. Children would be eligible for the current benefit package required by Medicaid law but, for most adults (the elderly would not be included, as yet, in the plan), there would be no list of benefits--as there are today. HMOs and other providers--not the state--will have unprecedented flexibility to determine the scope of benefits. In essence, Florida Medicaid beneficiaries will move from a defined benefit to a defined contribution plan.
When Bush first announced his proposal last spring, most observers thought passage would be a slam-dunk. That is, the Florida legislature, with Republicans in the majority in both houses, would rubber stamp sending the waiver to the federal government for approval and that the administration, headed by the governor's brother, would be pretty quick to say yes to an innovative, market-based idea.
But that's not what happened--at least at first. The Florida legislature balked and then relented at the last minute with a limited mandate: a pilot program in two counties. CMS, on the other hand, raised few questions. Within 16 days of receiving the application, it approved the waiver--a record-setting pace. Waiver applications of this complexity usually take two months to move from receipt to approval.
The Florida legislature gets the final say about whether the CMS- approved version will be implemented. In the likely event that it will say yes, many Medicaid clients in Broward and Duval counties will have to slog through all the fine print that is a health insurance plan. They'll have to figure out whether they'd be better off with, say, a plan that offers unlimited doctor visits but strict limits on prescription drugs or vice versa. And they would have to weigh such factors against the annual dollar threshold of each plan. Just as in the private sector, these Medicaid beneficiaries will face a maximum benefit level. Once they use that up, they will have to pay for services out of their own pocket, find sources of uncompensated care, or simply not get care if they reach the maximum benefit.
The trade-offs and details are complicated--and they are the same ones any person shopping for a private-sector health plan faces. The challenge of the chore explains, in part, why a recent survey by the Commonwealth Fund, a private foundation, revealed that working adults prefer that their employers select health plans rather than provide them with an account to purchase insurance themselves. The findings suggest that the choice that really matters to people is selecting their own doctors.
This aversion to health plan choice is within a population that has generally higher levels of education and more confidence in interpreting written material than most Medicaid populations have. It is also an issue for Medicare participants faced with the new Part D prescription drug benefit. There, beneficiaries are being asked to evaluate 10 or more prescription drug plans to figure out which one to sign up for. States are gearing up for a flood of phone calls from dual eligibles--elderly Medicaid patients who will be switching to the Medicare benefit--who have a hard time figuring out the plans, as well as from other retirees who are trying to decide whether they are better or worse off with their existing drug coverage.
Some of Florida's Medicaid beneficiaries would have to apply a similar calculus to the range of plans their premiums will buy. The risk is high. Choose the wrong plan and you could be out of luck if you get sick. Or you could end up in bankruptcy.
Giving us all more responsibility for our health care is a hot idea right now. It is supposed to help straighten out some of the misbegotten incentives for care that drive up the cost of health services. What's the politically correct phrase for it--taking ownership? Well, that's a fine and dandy principle in theory but not, I think, when it comes to parsing through the fine print and complicated details of a health insurance plan.