Florida’s Medicaid ‘Fix’ – What are they thinking??

Or perhaps more accurately, what are they smoking?
From HealthNews Florida comes the news that a state Senator, one Joe Negron (R Stuart) has come up with the brilliant idea of shoving most of the state’s Medicaid beneficiaries into a state-run ‘managed care’ program – and if the Feds don’t like it, well, then, Florida will just do it without the billion-plus dollars the Feds contibute to Florida’s Medicaid program each year.
And that’s only this year. When reform kicks in in 2014, the dollars really start to flow, with the Feds contributing $24 billion to the state for the five years after 2014.
This isn’t speculation; Negron was recently quoted saying “as a state we’re prepared to manage our own program with our own resources.”
Florida – which is as broke as it could be – is about as likely to forgo a billion bucks of Federal assistance than I am to start at center for the Miami Heat.
This Negron is no dummy – his bio includes an MPA (master’s in public administration) from Harvard – but his grandstanding makes zero sense. Sure, you can chalk this up to political noise, but some of his other comments make you wonder if he really has any idea what he’s talking about.
For example, Sen Negron wants to require the new Medicaid managed care plans to:
– have a minimum Medical Loss Ratio of 90% – that’s a full five points higher than the requirement under ACA;
– increase physician reimbursement; and
– ensure the”benefits under Medicaid will not be worse than what any private citizen has, but not better, either.”
And this is somehow going to cost Florida taxpayers LESS than traditional Medicaid program?
Perhaps the Senator just isn’t very good at math. Forcing insurance companies – for profit insurance companies – to accept an MLR of 90% – and to pay docs more – and to provide benefits that – in his own words – are equal to those received by private citizens – is going to cost a fortune – waaaay more than a regular old run-of-the-mill Medicaid program.

Let’s see. An insurance company has to make about a three percent profit – ideally more, but less than three percent and no one’s going to provide the investment funds to get the thing started.
Now, we are also dealing with Medicaid patients, many of whom have chronic conditions that don’t lend themselves to doctor-only management and require investment in disease management programs that are heavy on IT and clinical support service requirements. The health plan also has to communicate, provide information and resources and interpreters, credential, contract with, and manage providers, manage pharmacy spend, and market their services to potential members.
Plus they need to have a supply of cash in the bank for claim reserves in case there’s a flu epidemic or other event…
Oh, and they have to be on the watch for fraud – you know, the kind that went on at the current Governor’s former company, the kind that resulted in a $1 billion plus fine.
And do all this for seven points?
I’ve worked for major health plans – both as an employee and consultant, and there’s no health plan in the world that can do that – except Medicare, which doesn’t have to worry about claim reserves, or investors, or distribution, or a lot of other stuff that costs money.
What does this mean for you?
I guess they don’t teach finance at Harvard’s public administration program…or perhaps Negron missed that class.