NCPA - National Center for Policy Analysis


December 6, 2005

Florida and South Carolina are not waiting for Congress to reform Medicaid. They are taking matters into their own hands by pursuing federal waivers that will allow them to introduce choice, individual control and competition into Medicaid, says Nina Owcharenko of the Heritage Foundation.


  • In Florida, 2 million people are covered by Medicaid; in 2005, about 24 percent of the state's budget will fund the program, and by 2015, Medicaid will consume nearly 60 percent of the budget.
  • In South Carolina, nearly 20 percent of the population is on Medicaid, including 40 percent of children and 30 percent of seniors; nearly 19 percent of the state's budget will fund Medicaid in 2005, and by 2010, it is expected to consume 24 percent of the state's budget.

Since these trends are unsustainable, Florida and South Carolina have decided to incorporate free market strategies to stabilize and improve their Medicaid programs over the long run, says Owcharenko. The basic principles include: competition, choice and stability; specifically, the proposals are designed to:

  • Establish a fair and equitable financing system by providing each enrollee with a defined contribution so that states can adequately finance enrollees' health care based on need, while making the budget more predictable.
  • Enhance and improve coverage options by providing a menu of competing state-approved options, such as managed care plans, preferred provider organizations and provider-based networks.
  • This will allow participating plans the flexibility to design benefit packages that are tailored to meet individual Medicaid enrollees' needs.
  • Educate and engage enrollees by providing counselors to help them assess their needs and select the plan that is best suited for them.

Furthermore, the proposals create a greater incentive for enrollees to become more active in their overall health care, says Owcharenko.

Source: Nina Owcharenko, "Florida and South Carolina: Two Serious Efforts to Improve Medicaid," Heritage Foundation, November 18, 2005.


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