12.7.1 Medicaid Reform
On February 8, 2006, the White House Office of the Press Secretary released a fact sheet on the Deficit Reduction Act of 2005 (signed by President George W. Bush) stating that "The Deficit Reduction Act is an important step forward in bringing mandatory spending under control." The Office reported that the costs of Medicare and Medicaid are straining budgets at both the federal and state levels. The Deficit Reduction Act (DRA) restrains spending for entitlement programs while ensuring that Americans who rely on these programs continue to get needed care.
Following is an excerpt from the Provisions Of The Deficit Reduction Act as reported by the Office of the Press Secretary:
"The Deficit Reduction Act Will Also Reduce The Growth In Medicaid By Nearly $5 Billion Over The Next Five Years. The Deficit Reduction Act helps restrain Medicaid spending by reducing Federal overpayment for prescription drugs so that taxpayers do not have to pay inflated markups. The bill also gives governors more flexibility to design Medicaid benefits that efficiently and affordably meet their states' needs, and tightens the loopholes that allowed people to game the system by transferring assets to their children so they can qualify for Medicaid benefits."
Options provided under the Act include cost-sharing, flexible benefits, and health opportunity accounts (HOAs). The design plan is to encourage preventive health care (like HMOs) among beneficiaries and to choose lower-cost alternatives for equivalent care such as purchasing generic prescription drugs instead of brand name drugs.
Florida's plan gives beneficiaries a risk-adjusted premium to buy a state-approved insurance product of their choice from a managed care organization.
(See page 327, Florida study manual, for additional information.)
