Florida Panhandle Nurse Practitioner Coalition

Florida could get $39 million to help with state employee health insurance costs

Posted almost 15 years ago by Stanley F Whittaker

Florida has been approved to participate in a program that could lower its state employee health insurance costs by nearly $40 million in the next two years but is made possible by the federal health care overhaul legislative leaders have decried as unconstitutional. 

The U.S. Department of Health and Human Services announced in an October press release that it had accepted the Department of Management Services request to participate in the $5 billion program meant to lower the costs of employer sponsored health insurance coverage for early retirees who aren’t eligible for Medicare. 

The Early Retiree Reinsurance program pays participants for 80 percent of the medical claims ranging between $15,000 and $90,000 incurred by early retirees and their spouses.

The DMS application notes the state group plan provides coverage for chronic conditions such as diabetes, coronary artery disease, joint replacement, depression and renal failure among other conditions that result in bills exceeding $15,000. It estimates that for 2010 “proceeds” to the early retiree reinsurance program could equal $26.3 million and in 2011 the state could receive $23.1 million. 

The grant application says the dollars would be used to offset the costs of future premium increases for all employees as it doesn’t distinguish its retirees from active employees.

The Legislature took steps last year to bring into control a projected deficit in the state employee health insurance trust fund -- which helps pay the costs of state employee health benefits. The latest economic analysis shows that the fund will be in the black for 2011-12 but is expected to run a $334.5 million deficit in 2012-13 and a $583.1 millin deficit in 2013-14. 

Legislative leaders have criticized the federal health care overhaul and Attorney General Bill McCollum has led a legal challenge to overturn it. But many Florida agencies have been applying for the grant dollars made possible under the sweeping reform bill.

The Office of Insurance Regulation received a nearly $1 million grant to help better regulate insurance rates, and the Agency for Health Care Administration has been awarded grants worth more than $4 million, including a $1 million grant to study the development of insurance exchanges.

In response incoming House Speaker Dean Cannon last week sent a letter to all state agencies asking that they give the Florida Legislature a full accounting of everything they have done in connection with the Affordable Care Act.

He also demanded that no agencies take any steps past Nov. 15 without notifying and consulting the Florida Legislature.

Katie Betta, a spokeswoman for Cannon, said on Friday that his letter did not "take a specific policy position in individual components" related to the health care overhaul but "rather to highlight that as a whole the current tools for authorizing policy-related actions are not sufficient for a massive policy shifts that affects 1/6 of the economy." Betta added that Cannon wants to make sure that lawmakers are provided information about what state agencies are doing.

Linda McDonald, a spokeswoman for DMS, said department won’t do anything with the state group insurance plan until it receives approval from the Legislature.

The Early Retiree Reinsurance Program is a temporary program that expires January 2014 when early retirees could purchase health insurance policies through an exchange.

More than 130 Florida employers, including some large ones such as Blue Cross and Blue Shield of Florida and CSX, as well as a spate of communities and municipalities, have applied to participate in the program. According to the HHS release, 130 companies Florida organizations have been accepted into reinsurance pool.


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