Most plans won't pass muster

By Carol Gentry
6/22/2010 © Health News Florida

Most health policies that cover small groups and individuals in Florida – including the state’s own Cover Florida plan – likely will flunk federal requirements that take effect in September, the governor’s office says.

In fact, Florida law itself is at odds with the new Patient Protection and Affordable Care Act, which President Obama signed into law March 23, said Dave Foy, deputy chief of staff for Gov. Charlie Crist.

Six months after the effective date, the Act says, all major medical plans will have to get rid of lifetime limits on coverage. They will also be severely restricted in the annual limits they can set, which will be governed by rules still to come from the Department of Health and Human Services

“This will affect probably the majority of health insurance policies in Florida,” Foy said, those covering millions of Floridians.

The only caveat, he said, is that HHS rules could define “major medical plans” in such a way that some low-cost plans with limits might be exempted.

“That’s the guidance we’re waiting for,” Foy said.

Pres. Obama was to meet with representatives of insurance companies today to discuss consumer protections under the new legislation, according to the Associated Press. It is not clear which provisions he will address.

Florida’s insurers hope he will “relax” some of the requirements that could make companies decide to leave the state, said Bob Lotane, spokesman for the National Association of Insurance and Financial Advisors-Florida. One of those that has created concern is a requirement that insurers spend 80 to 85 percent of the premium on patient care.

Removing the annual and lifetime limits on policies is yet another factor that would make them more expensive, Lotane said.

“This is going to take a market that has little competition and make it even less competitive,” he said.

The Florida market lacks competition because the state Legislature has imposed a great many “mandates,” health treatments that insurers must cover, he said.

Large-group plans are exempt from state requirements under a federal labor law, but they affect small employers and individuals.

Annual and lifetime limits are part of the “basic” and “standard” policy definitions under state law. Thus the Legislature will have to revise those laws in 2011, Foy said. 

"Cover Florida," Gov. Crist's own attempt to address the state's massive number of uninsured -- above 3.8 million -- authorizes plans that set annual limits that are much lower than most policies. This was the trade-off required to get insurers to participate, since they are not allowed to turn high-risk applicants away.

Even with the strict annual limits, plans are having trouble making the finances work. Two of the six active Cover Florida plans are leaving the program, Florida Tribune reported earlier this month. 

The dominant player in Cover Florida, Blue Cross and Blue Shield of Florida, was given state permission to increase premiums by 11 percent early this year after showing medical costs justified it. A spokesman for the company said Monday that officials there were waiting for state guidance on how to fit the program in with the new federal law.

Another planned program to address the state's uninsured, Florida Health Choices, will also be eclipsed by the new federal law unless its board decides to apply to become the exchange that uninsured persons can use to shop for a plan.

--Carol Gentry, Editor, can be reached at 727-410-3266 or by e-mail.