Florida gives 7.7 percent rate increase to Medicaid insurers

Published Aug. 28, 2015

State health officials have approved a 7.7 percent rate increase for the private health plans covering Florida's poorest residents.

The plans had asked for a $400 million raise plus a 12 percent rate increase, saying they needed the money to cover rising prescription drug costs and an unexpected uptick in doctors visits.

But the state Agency for Health Care Administration, which oversees Florida's $23 billion Medicaid program, wasn't willing to go that far.

"The 7.7 percent increase takes into account the recent Legislative hospital rate increase, pharmacy trends including new drugs now on the market and other program related changes," the agency said in a statement Wednesday.

Florida Association of Health Plans CEO Audrey Brown called the final figure the "result of a collaborative dialogue between the health plans and our state partners."

"This is a step in the right direction and the plans look forward to continuing this dialogue with the state to ensure our shared goals of providing quality health care while respecting every dollar of taxpayer funding," Brown said.

Florida's taxpayer-funded Medicaid program serves about 3.5 million low-income residents. Private insurers began managing the benefits in 2006 — a push led by then-Gov. Jeb Bush. The so-called Medicaid Managed Care program went statewide last year.

The new model was on track to reduce Florida's Medicaid costs by 5 percent. But earlier this year, the private plans said they were losing money and asked the state for a $400 million boost.

They asked for a 12 percent rate hike in May.

The request caught the attention of Gov. Rick Scott, who blamed the hospitals for charging Medicaid plans more than is legally allowed. Scott has since ordered an audit of 129 facilities.

The governor's office declined to comment on the approved rate hikes.

Contact Kathleen McGrory at or (727) 893-8330. Follow @kmcgrory.