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Commentary

Medicaid Rx
Wall Street Journal, 1-2-05

Maybe Jeb Bush will never run for President. Still, Florida’s Governor is showing real presidential vision with his plan to address Florida’s Medicaid crisis.

“Over the past six years, Florida’s spending on Medicaid has grown at an average of 13% a year while service has worsened…One quarter of the state’s budget already goes to Medicaid, a figure that, if left unchecked, is projected to hit 59% in 10 years.”

And Florida isn’t alone: every other state is facing rapidly rising Medicaid costs, if not an outright crisis. Why? “From the consumer’s perspective, Medicaid is a nearly incomprehensible maze—which explains in part why so many participants head for expensive hospital emergency rooms when they need routine treatment.”

Governor Bush’s proposal: infuse Medicaid with consumer choice, “starting with letting participants decide how to spend the money allocated on their behalf. Each participant would be assigned a premium with which to purchase coverage for basic and catastrophic care. Options would include HMOs, insurers, and community-based networks of physicians and hospitals. Premiums would be risk-adjusted, which is to say that someone with AIDS…would receive a higher premium than a generally healthy person.” Patients who complied with doctors orders would even earn extra subsidies in flexible spending accounts that they could take with them when they leave Medicaid and use to defray other health expenses.

In short, Florida’s program has the potential to become a national model for how the government provides health care to its poorest citizens through market incentives and personal empowerment.



Project FDA.
  
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