Florida health insurance block health-care reform
On his first day as Florida’s new House speaker, Rep. Dean Cannon took a clear shot at President Barack Obama’s new health-care reform law. Easy To Insure ME has the answers
“Should it really be the role of government to require people to purchase a health insurance product they don’t want, raise taxes to give that same product to others who can’t afford it, and commandeer our state government and its resources to carry it out?” Cannon, a Winter Park Republican, told House members after being sworn in two weeks ago.
“Or, should we work to limit government and empower the private sector?”
On numerous fronts, Florida policymakers have already answered that question.
While the fight against President Obama’s health-care reform may be centered in the Beltway, Republican resistance to the sweeping new mandates is also taking shape in Tallahassee. Among the battlefronts:
• Florida led the charge with 19 other states last March by challenging the law in federal court, claiming the mandates that uninsured people buy coverage violated states’ rights. A judge in Pensacola is expected to rule shortly after a Dec. 16 hearing on whether the suit can move forward. More states are expected to join after a new crop of state attorneys general are sworn into office in January.
•Last spring, GOP legislators hastily drafted a constitutional amendment spelling out that Florida businesses and residents couldn’t be forced to buy insurance, but a Tallahassee judge threw it off the November ballot for “misleading” language. Lawmakers have re-filed an altered version and hope to place it before voters in 2012.
•And perhaps most significantly, legislative leaders are poised to block spending and rules necessary to implement the law. Already, state regulators has refused to impose minimum spending mandates that might generate refunds for consumers – but which health insurers say will hurt their profits. And Gov.-elect Rick Scott has also made clear he doesn’t want the state doing anything to help the law along.
The Patient Protection and Affordable Care Act passed last spring anticipated that the states would lead the way on many of its more than 100 changes to the nation’s health care system. With 3.8 million uninsured residents, Florida is one of the states that would be most affected by the law.
The most controversial reforms – including the requirement that individuals buy coverage or pay a penalty — don’t start until 2014, and phase-ins continue until 2018. But the bill requires states to start working now to improve their data-collecting and enforcement mechanisms.
It was hoped states would create their own insurance exchanges, to match individuals with insurance plans; establish “high-risk” pools to insure people now shunned by providers; and police new restrictions on insurance company profits.
But Gov. Charlie Crist opted last spring not to immediately tap into federal grant money to create a Florida high-risk pool to cover people with pre-existing medical conditions, deferring to the federal government. And now Cannon, R-Winter Park, and Senate President Mike Haridopolos, R-Merritt Island, may seek to block any cooperation by the state.
Florida has been awarded $43 million in grants to provide $250 rebates to seniors who fall into the “donut hole” in the Medicare prescription drug program; to help prepare the Office of Insurance Regulation to evaluate out-of-state insurers seeking to sell health coverage in the state; and to plan for creating a health-care marketplace, or “exchange,” and other changes.
But even before he was officially named speaker, Cannon warned Crist that no state agency should take any steps to comply with the law “without clear and comprehensive guidance from the Legislature.” The Oct. 19 letter demanded an itemized accounting of all state agency activities regarding the federal law.
Specifically, the letter singled out the Office of Insurance Regulation for work it has begun – and which legislative budget-writers approved – to study how Florida’s health-care laws should be amended to conform to the federal reform, and to boost the state’s ability to handle new rate-filing data.
“Not only are Florida insurance officials helping the federal government to write rules on these matters, but [OIR] is jumpstarting these new regulatory functions by developing data systems necessary for enforcement,” Cannon complained.
He added: “We intend to develop a clear and statutorily-defined framework for Florida agencies’ activities in regard to the federal health law. Pending such legislative action, state agencies should examine each anticipated action or function in light of their specific statutory authority.”
Laura Goodhue, executive director of Jupiter-based health-care advocacy group Florida CHAIN, said the criticism appeared designed to bully agencies into slowing their efforts to follow the federal law.
“I know transparency is important in implementing laws, but creating a chilling effect is certainly not helpful,” said Goodhue, who attended meetings with OIR over the last year as part of an advisory health insurance board.
In response, most all of Florida’s state agencies produced itemized lists of what they had done — down to how many staff hours Department of Management Services staff spent examining new rules requiring lactation rooms and milk storage for breast-feeding mothers in the workplace.
Cannon spokeswoman Katherine Betta said last week that Cannon’s staff was still reviewing the responses and hadn’t decided “what the next step will be.”
OIR communications director Jack McDermott defended his agency’s work, adding there was no intent to be “an advocate for the implementation of federal healthcare.”
“Virtually all of this information — whether it is actual review of large group rates, or expanding data systems to collect additional data – would require additional statutory authority or administrative rules,” McDermott e-mailed in response to questions.
And recently, OIR decided to slow one of the new law’s reforms – by not imposing new profit limits on health insurers beginning Jan. 1.
A new federal “medical loss ratio” requirement would force insurers to spend 80-to-85 percent of the premiums they collect on medical care, with the remainder set aside for overhead including executive salaries and profit. Nearly half the country’s insured population are covered by providers that spend more than that on overhead and profit.
Florida’s “medical loss ratio” is 65-to-70 percent, and OIR will ask the federal government for a three-year waiver from the tougher standard, said McDermott.
At a recent hearing, most of Florida’s main health insurers complained that the new standard would hurt their bottom lines and restrict the Florida insurance market. Insurance Commissioner Kevin McCarty agreed, saying he feared making the change next year would “destabilize” the market and hurt competition.
The move could have a pocketbook implication for Floridians.
The law requires insurers to provide rebates to customers if they exceed the overhead limits in 2011. The feds estimate the rebates could average $164 for individuals in 2012. But if OIR wins the three-year delay, Florida consumers won’t be eligible for those checks in 2012.
“To me, the delay obviously would be helpful to the insurance companies and HMOs, and not to the patients,” said Senate Minority Leader Nan Rich, D- Weston. “That’s less money for care for patients.”
Legislative conservatives like Rep. Scott Plakon, R-Longwood – who’s re-filed the constitutional amendment that says Floridians could not be compelled “directly or indirectly… to participate in any health-care system” – say they are determined to fight every way they can.
Plakon’s House Joint Resolution 1 has already picked up a prime sponsor in the Senate: its new leader, Haridopolos.
“We have to follow the law. But in the process, we need to put Floridians first,” Plakon said. “So if there is any room there, we would default to the position of putting Floridians first instead of this kind of massive federal takeover.”
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