Monday, July 28, 2008

Health Alert: Medicaid Reform that Works

By John Goodman

The most radical Medicaid reform plan in the country is entering its second year. Initiated by Florida Gov. Jeb Bush, the program lets enrollees choose among competing private health plans, and they have incentives for healthy behavior in the form of credits to a special type of Health Savings Account. The results:

Per capital costs are down.... Down?.... Yes, down.... By 7.2%.
Benefits are up—with enrollees getting over-the-counter drugs and preventive dental care they didn’t have before.
Half the enrollees have engaged in at least one new healthy behavior, earning $4.3 million in credits to their HSA-type accounts.

And for the technical folks, Florida Medicaid will avoid community rating, ala the federal employees’ plan (which liberals are increasingly coming to love) and instead risk rate their premiums, ala the Medicare advantage program (which many liberals hate). As a result, health plans will compete to attract the sick instead of trying to avoid them.

NCPA Senior Fellow Michael Bond (who helped create this program) has a summary (of his larger study), which I am attaching as a comment. [Click Here]