Florida’s Innovative Alternative to Medicaid

by Avik Roy

Grace-Marie writes about Florida’s new proposal to replace Obamacare’s Medicaid expansion, which was introduced by Florida state-house speaker Will Weatherford and Richard Corcoran, who chairs the House’s Health and Human Services Committee (both Republicans).

I agree with Grace-Marie: This is an excellent free-market alternative to expanding Obamacare, one that other states could learn from. The plan would cover a majority of the uninsured population that would have otherwise been covered by Obamacare’s Medicaid expansion, as I illustrate in the below pie chart.

Instead of forcing poor people onto the broken Medicaid program, the Weatherford-Corcoran proposal would give each eligible beneficiary a $2,000 annual contribution to a health savings account called a CARE account. Each enrollee would have to make a $25 monthly payment to the account, giving them skin in the game, and also meet the same work requirements that individuals must meet to gain eligibility for the traditional welfare cash-transfer program (TANF, for you wonks).

Beneficiaries could then take that $2,300 a year and use it to buy catastrophic coverage, or save for a rainy day. Any leftover funds would roll over to the following year. Once it’s fully up and running, Weatherford and Corcoran project that it would cost the state about $237 million a year, which compares favorably to the $1.3 billion a year the state would have to spend on Obamacare’s Medicaid expansion once fully implemented.

The Florida proposal represents as free-market a proposal as we’ve seen introduced in recent years. If you’re interested in more details, I have a comprehensive write-up over here.

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