Test: Florida Health Insurance Advisory Board briefing on the federal Patient Protection and Affordable Healthcare Act: May 4, 2010

May 7, 2010



The regular business meeting of the Florida Health Insurance Advisory Board (“FHIAB”) on May 4, 2020 in the Orange County Commission Chamber, in Orlando, was devoted entirely to a briefing on the new federal Patient Protection and Affordable Healthcare Act (“Act”) and its effects on states.

It was followed by a joint public hearing on the same issue with the FHIAB and the Florida Office of Insurance Regulation (“OIR”).

The briefing was conducted by Florida Deputy Insurance Commissioner Mary Beth Senkewicz.  Her presentation can be viewed by clicking here.  Highlights from her presentation follow.  

More detailed grids and reports with requirements, implementation deadlines and detailed explanations of various aspects of the Act developed by the National Association of Insurance Commissioners (“NAIC”) can be viewed on the NAIC Web site by clicking here and clicking on Related Documents and Resources.

High-risk pools for people with pre-existing conditions who do not have health insurance are scheduled to be operational in every state by July 1, 2010.  A total of $5 billion has been allocated for this implementation, with $351 million allocated for Florida.

The Secretary of Health and Human Services (“HHS”) sent letters to all of the states on April 2, 2010 asking whether that state wanted to contract with HHS to operate its own high-risk pool or leave it to HHS to operate it.  So far, 31 states have responded that they intend to contract with HHS and operate their own pools and 18 states, including Florida, replied they would leave operation of the pool to HHSThe law also allows HHS to contract with a nonprofit organization to operate a state’s pool and HHS is currently advertising on the Internet for any interested nonprofits.

Whoever runs the pool must set up an Internet Web site where individuals and businesses with one to 100 employees can type in their zip code and find several plans to choose from.

The Act will be phased in over a five-year period but some important pieces that are to take effect on September 23, 2010 include the elimination of lifetime benefit limits, restrictions on annual benefit limits, first-dollar coverage for preventive services, no rescissions, direct Ob/gyn access, no pre-existing condition exclusions for children, dependent coverage up to age 26 and an independent external appeal process.  Florida is one of a few states that currently do not have an independent external review process.

There also will be federal grants to fund state ombudsmen to assist people throughout the process and stringent reporting requirements that states must meet.

Ms Senkewicz said that HHS is in the process of drafting the rules to implement the legislation and that she expects to have more details available by October 1, 2010.

In 2011, health plans will be required to have medical-loss rations of 85 percent for large-group plans and 80 percent for small groups and individuals, meaning that percentage of premium must go directly to health care and improving the quality of care.

In 2014 health plans must be guarantee-issue with no pre-existing conditions exclusions, restrictions on rating factors and no annual limits on coverage.

Also by January 1, 2014 state-based insurance exchanges must be operational for individual and small group markets that will provide standardized information on plan choices and help consumers enroll in the plan of their choice.  The exchanges must have an Internet portal listing qualified plans and a calculator for rates and any subsidies for which the consumer may be qualified.

The Florida Health Choices Corp. is already a nonprofit and could act as the state’s insurance exchange but it would require significant amendments to the statutes it operates under.

If the state does not create an exchange, the Secretary of HHS will create one.  The state exchanges must create a rating system for plans, perform satisfaction surveys and determine if consumers are eligible for any other state or federal health insurance programs.

The exchanges will require documented justification for any rate increases.

Current health plans may be grandfathered in if they comply with the required coverage and meet other requirements.

Ms. Senkewicz said many questions remain for states to be able to decide how they want to comply with the law but that those will be answered when HHS completes its rule-making process.

She added that the NAIC is working closely with HHS and other agencies and has several committees, task forces and working groups drafting model acts and regulations for the states.


Should you have any questions or comments, please contact Colodny Fassand Abate.


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