Rick Scott’s Privatization Experiment in Florida

A million Floridians will now be eligible for Medicaid––the Obama administration is happy about that.

Republican Rick Scott gets to do it his way––in an almost entirely private market.

This from today’s Tampa Bay Times:

His [Scott’s] endorsement of the expansion came hours after the federal government agreed to grant Florida a conditional waiver to privatize Medicaid statewide for the state’s more than 3 million current recipients, more than half of which are children or people under age 21.

Scott has agreed to only a three year trial expansion and the legislature must vote in favor of it––not a certainty. And, the Obama administration is taking some big risks––a five county trial of Scott’s privatization program has had lots of problems.

In prior posts I have said that Republican governors, so adamantly opposed to “Obamacare,” ought to go to Washington and negotiate a deal on Medicaid expansion. If they believe they can manage Medicaid better than the traditional federal route, which is what they claim every time they demand block grants, then they should put a deal on the table. Ultimately, the feds will pay 90% of costs and the state will pay 10% of the cost of the expansion. The Republican governors don’t believe they can save 10% if given more flexibility?

Scott did that.

But other leading Republican governors like Rick Perry of Texas, Scott Walker of Wisconsin, Bobby Jindal of Louisiana, and Sam Brownback of Kansas continue to be bullheaded about it and millions of people are not going to have health insurance because if it.

Scott has now proved an important point.

The Obama administration will deal.

Now, what’s their excuse?

Robert Laszewski has been a fixture in Washington health policy circles for the better part of three decades. He currently serves as the president of Health Policy and Strategy Associates of Alexandria, Virginia. You can read more of his thoughtful analysis of healthcare industry trends at The Health Policy and Marketplace Blog, where this post first appeared.

10 replies »

  1. Look no further than the political leaders and follow the money and slush funds. Patients suffer. Politicians become wealthier. Now is the time to review the saga of the Columbia HCA fraud on CMS.

  2. the rick scott experiment is not new — look at AZ…

    2 years ago, a $1billion medicaid shortfall, cuts to payments and services.

    won’t work, big payoff to cronies…

  3. Florida is also a state with a long history of Medicare fraud. The health plan market in Florida has a lot of shady characters looking for a piece of the Medicaid program and willing to pay for it. It is fertile ground for a scandal, the proverbial “sunny place for shady people”.

  4. If most of the cost of Medicaid (health care to the poorest of the poor) is wasted on administration and fraud then you might believe that “privatization” will be able to redirect those savings to the people who need health care through Medicaid. You might also believe that those savings would be able to allow expansion of services to a greater number of people in need.

    But that will not happen. “Efficiency” will by definition reduce services to those who need them and reduce eligibility. And the political accounting of this will be justified by “savings” to the taxpayer, not health care to the poor.

    The irony in this is that Florida and Obamacare is “trusting” a governor who headed a “private” health care company convicted of Medicaid fraud.


  5. This is a big deal. No one really knows how to cut health care costs, so this kind of experimentation is excellent.


  6. The view of Rick Perry and others is “Why rush?” Why accept a, potentially unfunded, obligation when you don’t yet have to? If they don’t accept the medicaid expansion, today, they can watch and see how it pans out in the other states, including Florida. They can also wait to see how many of the uninsured end up in the insurance exchanges, where the federal government is footing one hundred percent of the cost of the subsidies.