Insurers so far not thrilled with state insurance plan

Jul 28, 2008

Naples Daily News--July 27, 2008


The invitation to bid went out to insurance carriers in Florida but it doesn’t appear they are champing at the bit.

That’s in stark contrast to the fanfare given this past spring to legislation lauded by Gov. Charlie Crist called Cover Florida, to provide low-cost insurance plans to the uninsured.

The large insurance carriers are saying little as they evaluate bidding requirements, with proposals due to the state Agency for Health Care Administration by Aug. 12. The state intends to award contracts Oct. 1.

“We are anxious to see what the responses are,” said Jose Gonzalez, with Allied Industries of Florida, an alliance of 10,000 businesses in Florida that supported Crist’s Cover Florida plan that he signed into law May 21.

“The (coverage) mandates are what drive the costs of insurance and the plan was to be somewhat mandate-light to give the companies some flexibility,” he said.

The solicitation for bids stipulates that insurers must submit proposals for two plans, of which one would provide catastrophic coverage for hospital care and the other can be basic “bare bones” coverage. The idea is that the basic plans would include preventive services, some diagnostic testing and other services with monthly premiums around $150.

The state anticipates awarding one statewide contract and additional regional contracts.

Florida has 3.2 million residents who don’t have insurance, because it is not offered by their employer, they are self-employed and can’t afford it, are not willing to buy insurance or don’t qualify for Medicaid.

One of the goals with Cover Florida was supposed to be guaranteed coverage for anybody. However, the bidding document states that insurance carriers will be allowed to exclude coverage for a pre-existing condition under certain terms for up to one year. The insurance plan must provide written notification to the individual of such.

Along with details of covered services, caps, and prescription benefits, insurers must outline how the coverage is portable so enrolled people can continue their coverage if they move.

For the first year starting in 2009, the state is requiring that plans accept applications anytime during the year from people. Beginning in 2010, insurers can restrict enrollment to various times of the year.

From the start of the governor’s campaign to pass the legislation, the insurance industry was lukewarm to it and expressed doubts that uninsured working people would buy the coverage.

Officials with Blue Cross/Blue Shield declined to comment about the bid details until after contract awards. A Humana spokesman said the company does not plan to pursue a contract.

“We are not likely to submit a bid proposal on the ‘bare bones’ coverage, but we will fully analyze and evaluate the (request for a proposal) before making a final decision,” said Humana spokesman Mitch Lubitz.

“We believe that Cover Florida won’t have a major impact in reducing the uninsured in Florida because major health insurers like Humana are already offering a wide variety of low-cost, high-deductible health plans, many with a health savings account, that provide Floridians with affordable with affordable health care coverage.”

Aetna spokesman Walt Cherniak said Aetna has not made a decision yet whether to submit proposals for Cover Florida.

“We’re still studying it,” he said, adding that Aetna is supportive of the governor’s plan to offer individual-purchase plans that are affordable to help reduce the number of uninsured.

A criticism of Cover Florida comes from the Center on Budget and Policy Priorities in Washington, D.C., which says the plans are unlikely to reduce the uninsured rate without premium subsidies for the low-income, said Judy Solomon, with the group.

“What struck me about the plan is that it would not cover impatient care and the emergency room,” she said.

“When you think about what you would want to be protected against, that is where want to be protected.”

In addition, Florida lawmakers in 2002 started a limited benefit plan for the poor, called Flex Plan, in select counties to start with and today the plans are available in three of the state’s 67 counties. Total enrollment in 2007 stood at 2,280 people, according to Flex Plan’s annual report.