NCPA - National Center for Policy Analysis


February 7, 2005

Taking a page from Bush's ownership society, Florida is reforming its Medicaid system through personal choice and individual accounts, according to the Wall Street Journal.

This is how Florida's proposed plan would work:

  • Each participant would be assigned a risk-adjusted premium with which to purchase coverage for basic and catastrophic care; options would include HMOs, insurers and community-based networks of physicians and hospitals.
  • Patients who follow the medical plan of their doctors -- take their medication, stop smoking -- will earn extra money that will be deposited for them in flexible spending accounts.
  • This money can be used for medical services not covered under the enrollee's basic plan, such as eyeglasses or dental care, or to purchase more expensive coverage.
  • Participants who eventually earn enough to get off of Medicaid will get to keep the money that's accrued in their personal accounts.

The plan must still be approved by the Republican-controlled state legislature and parts of the plan must receive waivers from the U.S. Department of Health and Human Services.

The need for Medicaid reform is clear: last year, for the first time, outlays surpassed combined state spending on elementary and secondary education. Florida currently spends 25 percent of its budget on the program; if left uncheck, the figure is expected to hit 59 percent in 10 years, says the Journal.

Source: Editorial, "Medicaid Rx," Wall Street Journal, February 2, 2005.

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