House Report: Overall Medicaid Costs Rising, But Individual Costs Down

Dec 11, 2016
Originally published on December 12, 2016 10:20 am

When Florida lawmakers new and old arrive for the annual lawmaking session they’ll be faced with a $25 billion issue: Medicaid. The state’s health insurance program for low-income Floridians just keeps getting bigger, despite continued efforts to control costs.

Florida’s decision to turn Medicaid over to private insurance providers was sold as a way to control the rising costs of the program, but as early as last year Democratic Representative Janet Cruz said she was starting to feel lawmakers were sold a bill of goods.

“I continually heard we would be able to contain costs, and that this would be much more cost effective, but I am looking at these numbers and I just don’t see that," she said during a September 2015 committee hearing.

“Even though it seems like a long time that we’ve been working on managed care, we’re still in a transition period," responded state economist Amy Baker.

Not much has changed since that September 2015 exchange.  More recent projections of the program show the price tag continues to increase. It’s slated to balloon from $25 billion to nearly $31 billion by 2020. Baker says the shift to Medicaid Managed care hasn’t shown a reduction in the overall cost of the program. But House health budge staff director Christa Calamas sees the increase in a different light.

“The whole program costs more every year. Most of those new costs are because we’re treating more people, more people have enrolled. This is what the costs are per-person—how much money Medicaid is paying to treat individual people—and that cost is going down," she told lawmakers during a recent presentation on the program.

Calamas notes the drop in per-person costs is not due to restrictions on care.

“So some of that is—nursing home population, the fewer people you treat there, that’s less money. What it shows is care management appears to be working. We’re preventing catastrophic, bad events from happening. If plans were denying care  we’d see a spike in those moments, but we’re not seeing that."

Children make up the greatest share of Medicaid recipients, but they also cost less to treat because they carry lower risks. Adults with disabilities,  and those in nursing home care cost more, but there are fewer of them. There are presently conversations about what to do with those populations—the state is working out a new payment system for nursing homes to try and reduce costs there, and there’s always an attempt to shave some dollars off the state’s medically needy program—which assists people who are low income but don’t qualify for Medicaid.

While the cost-per-person may be down, that doesn’t mean everything is rosy. Providers have complained about difficulty getting paid. Patients have complained about difficulties getting seen. And insurers claim the state has shortchanged them. Calamas says she believes there are probably other issues that just haven’t been brought up yet:

“I will tell you I think complaints are under-reported," she said. "We hear from constituents all the time, we hear from advocacy organizations that there are issues they aren’t reporting. It would help if they do report them so AHCA [The Agency for Health Care Administration] can track them and see if they are one-off problems, or a systemic problem. But we do have under-reporting of complaints.”

The federal government is presently picking up 61 percent of the tab while the state picks up the rest, but as the economy continues to recover, the federal share is slated to decrease about two percent, while the states is expected to go up in the next few years--compounding an already difficult situation.

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