In 2006, under former Governor Jeb Bush, Florida rolled out the most comprehensive Medicaid reform plan in the country. Studies from both The James Madison Institute and the University of Florida have shown these innovative reforms not only save money, but also improve the quality of care.

On Wednesday, the Florida Senate passed a proviso amendment to their 2010-2011 budget that would require the Florida Agency for Health Care Administration (AHCA) to draft a new federal Medicaid waiver.

This new waiver, if accepted by the Centers for Medicare and Medicaid Services (CMS), would essentially grant the state of Florida the ability to cap its Medicaid spending to the amount allotted by the state budget. The legislature would then be allowed to adjust optional eligibility groups and services depending on the amount appropriated. The waiver would also allow Florida to set up a voucher system where beneficiaries could purchase insurance products from private companies. Finally, the waiver would require higher-income Medicaid recipients to make coinsurance and deductible payments, but grant them incentives for efficiencies.

As it currently stands, the House does not have this language drafted as part of their budget package, so the provision’s fate will ultimately be determined in the budget conferences over the next few weeks. However, the amendment was sponsored by three of the top leaders in the Senate, so it’s very likely that the House will be persuaded into accepting this waiver request. The budget must be agreed upon by April 30, the end of Florida’s Regular Session.

In 1990, Medicaid represented 10 percent of Florida’s state budget. Once the 2010-2011 budget is finalized, Medicaid will swallow up approximately 27.5 percent of the state budget. This rate of growth simply cannot be maintained. The 2006 reforms were a giant step in the right direction, but with the passage of Medicaid expansion in the new federal health care overhaul, it’s time for Florida to lead the way in additional reforms.

Thomas Perrin is the Director of Public Affairs for The James Madison Institute. The views expressed by guest bloggers on the Foundry do not necessarily reflect the views of the Heritage Foundation.