Alternative Healthcare Plans Getting More Attention As Legislature Grapples With Cost

Oct 9, 2015

Credit taxcredits.net

Florida lawmakers are bracing for budget holes despite figures showing the state could end up with another year of surplus. Alternative healthcare proposals making their way through the Florida legislature as lawmakers look for ways to cut health costs without accepting billions in federal dollars to expand Medicaid.

Florida lawmakers have started rolling out several proposals and ideas to cut or curb healthcare costs. The move comes as one of the biggest parts of the state budget—Medicaid—gets bigger. State economist Amy Baker says that’s due to a number of reasons. Longer life expectancy, an aging population, and changes in medical technology. But there are two others that have been driving state conversations in recent months.

“The fourth one is prescription drug costs overall," says Baker, "but the other thing that’s going on is, we’ve some level shifts…part of it is we have more people demanding healthcare now.”

The demand growth is due to more people getting insurance through the Affordable Care Act, and some learning they’re eligible for Medicaid. The state has approved rate hikes for most of its insurers, including those charged with running Medicaid for low-income Floridians. Rate hikes are also coming for many plans sold in the federal government’s insurance exchange. Some insurance companies have said the surge in demand, especially in Medicaid is causing financial losses. But Republican State Senator Joe Negron says insurers are flush with cash.

“Insurance companies are now so profitable since the Affordable Care Act, they’re buying each other. Aetna is buying Humana, Anthem is about to acquire Cigna…so this is all good development for the insurance companies and their shareholders.”

But Negron argues it’s not good for physicians and doctors. There are growing issues with physicians who say they’re not paid properly for their services. And patients who have complained of narrow networks, and more restrictions on medications and services.

Now the state is trying to figure out what to do about it. Florida will have a budget surplus next year, but most of it will be sucked up as healthcare costs grow—due to more expenditures, and the loss of a federal program that supported hospitals treating low income patients. Another round of cuts to the Low-Income Pool is coming, and most lawmakers have dismissed talk of using other federal dollars to expand Medicaid to more people. Instead, as Senate Appropriations Chairman Tom Lee points out, they’ll be looking at alternatives.

“There are a lot of proposals out there from CON to Scope of Practice, having hospitals post their rates, to group health insurance. There’s reasons why there is so much focus on things like those," says Lee.

Many of these proposals have been circulating for years, and several were put forth by the State House of Representatives last year, but didn’t get traction in the Senate. The purpose is cost and how to bring it down while improving access to care.

Governor Rick Scott has targeted hospitals, which tend to carry a bigger financial footprint than other services. Scott—a former Hospital CEO— is using his Hospital and Healthcare Funding Commission to figure out why. The group has tackled issues like lifting restrictions on where healthcare centers can build, also called certificate of need—and allowing ambulatory care and recovery care centers to keep patients longer and do more minor surgeries.  His Funding commission has also recently turned its attention to balance billing, something commission member Eugene Lamb has happened to his family:

My mother-in-law went to the hospital. She’s 97 years old and she stayed overnight. And she had a bill of $12,000. And we were surprised because it cost so much.”

Senator Lee says the plans will be reviewed and judged based on how well they can bring down costs. He says he wants to address it this year, before it becomes an even bigger problem for the state. Medicaid already makes up the largest share of Florida’s overall budget.