Health & Health Insurance News

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ORLANDO, Fla.--Florida, which is fighting to overturn the federal health overhaul, is preparing to launch an insurance marketplace early next year that looks like a distant cousin of the ones being created under the federal law.

Florida's version aims to give small businesses – those with 50 or fewer employees – an online tool where they can easily shop for health plans offered in their county. The idea, backers say, is to entice employers who otherwise wouldn’t bother to offer coverage.

Florida would be the third state – and by far the largest — with an insurance exchange, following Massachusetts and Utah. The Florida program is a public-private partnership.

But there are key differences between Florida's exchange and the type that will be available in 2014 in all states through the federal law:

--Florida’s exchange is open only to small employers, not to individuals.

--The federal law provides subsidies to help lower-income individuals buy coverage through the exchange, and tax credits to some small businesses that cover their workers. Florida does not.

--The federal law requires health plans to offer certain "essential health benefits." Florida does not.

Participation in Florida's exchange is voluntary for both insurers and small businesses. But it is drawing only tepid support from health plans and insurance agents. That’s because both would pay a price for participating: Health plans would pay the exchange 2 percent of the premium for every policy sold through the exchange, and agents would pay $300 a year to sell policies through the exchange.

Ken Stevenson, a Tallahassee, Fla., insurance agent, says these extra costs, which would likely be passed on to employers, could end up making health coverage in Florida's exchange more expensive than policies sold outside it.

"It defeats the whole purpose of having this," he said.

Michael Garner, CEO of the Florida Association of Health Plans, said the insurance industry supports the concept of the marketplace, although key details have to be worked out. "There's no silver bullet, but anything that offers more alternatives to employers can make it more likely they will take up coverage," he said. 

Still, a top official with a large Florida insurer said the industry remains unconvinced that selling coverage through the exchange would offer any advantages over selling outside. He spoke on the conditionof anonymity because his company is part of an exchange advisory group.

For the past three years the Sunshine State has had the third highest uninsured rate in the country, after Texas and New Mexico, according to Census data. More than 21 percent of Florida residents under 65 are uninsured, or about 3.8 million people.

Premiums for a family health plan in Florida offered by employers with fewer than 50 workers increased 21 percent from 2003 to 2009, according to a report by the Commonwealth Fund. That is below the 29 percent national average. But Florida is one of 16 states and the District of Columbia where the average annual premium for family coverage equaled 19.9 percent or more of median household income, the fund stated.

Florida's Republican leaders are staunchly opposed to the federal health law. Then-Attorney General Bill McCollum was quick to file suit against it last year and 25 other states joined in the effort. Gov. Rick Scott turned away millions of dollars in federal health law grants, including money that would help establish a state insurance exchange that meets federal requirements. Florida is also seeking a waiver from the law's requirement that insurers spend at least 80 percent of premium revenue on health costs.

Efforts by states to set up an exchange under the federal health law have been slow getting off the ground. So far about a dozen states have passed legislation enabling an exchange, and Rhode Island is establishing one through executive order.

Massachusetts' and Utah's exchanges, which have been running for a couple years, are quite different. The Massachusetts exchange, known as the Connector, solicits bids from insurers and negotiates prices and benefits to keep costs down and requires insurers to offer standardized policies. The Utah exchange accepts any health plan as long as they meet some minimal requirements and doesn't restrict the products they offer. Florida is being modeled after the Utah exchange.

The Florida initiative, which officials refuse to label an exchange, predates the federal law. The program, known as Florida Health Choices, was created in 2008 at the urging of then-Florida House Speaker Marco Rubio, a Republican who is now a U.S. senator.

The program initially languished, but in recent months a company was hired to administer it, insurers have begun to submit benefit and cost data, and officials plan to make the site live in early 2012, according to Rose Naff, executive director of Florida Health Choices.

"We are making significant progress," she said.

The exchange will sell policies to employers with four to 50 workers. Employers will be able to get a base premium from the Web site but will have to work with a participating agent to get exact prices, which vary based on the age and health of employees. 

Naff cited two big advantages of the exchange: Employers can fill out one application to apply for coverage at multiple insurers, and they will be able to offer up to four different health plans to their workers.

Yet small businesses are not showing much enthusiasm for Florida Health Choices. Bill Herrle, executive director of the Florida chapter of the National Federation of Independent Business, said it will still be difficult to compare plans, because there are no standard policies for carriers to offer. In addition, he said, the exchange won't directly lower premium costs.

"It will have minimal effect," he said. 

Naff acknowledges that her exchange could be short lived or forced to make major changes in 2014, when the federal government will offer an exchange meeting requirements of the ACA in states that fail to do so on their own. "There are a lot of unanswered questions. … If there is a federal exchange in Florida, we may have to evolve into something else," she said.

- "Provided by Kaiser Health News." (and link to www.kaiserhealthnews.org) 

When she got home, Young immediately called the agent to discuss what she had just seen and been told, and let him know she needed to cancel before the new policy took effect Jan. 1.

"He all but called me a liar," she said.

Over the following months, Young was dogged in her efforts to prevent her old insurance from lapsing while also preventing the new insurance from kicking in. She repeatedly called the company - American Progressive, a subsidiary of Universal American Financial Corp. (UHCO, News) She mailed a premium check to her old plan. They returned it. She called lawmakers and scores of government agencies, she said.

The new policy kicked in anyway, and it would take five more months before she could switch back to her old plan. Along the way, she missed physical therapy sessions and switched to cheaper, but less effective medications.

Bob O'Malley, a spokesman at Universal American Financial Corp., did not know the details of Young's case. But he did say all beneficiaries are allowed to switch plans during an open enrollment season - the first three months of the year. If Young had enrolled in still another plan then, it would have replaced her American Progressive coverage.

"That's why open enrollment is a three-month period, so people have an opportunity to change their minds," he said.

Officials with an advocacy group that helped Young get her old insurance back - the Medicare Rights Center - said she represents hundreds of seniors who have contacted them because they had trouble getting out of insurance bought as a result of misleading sales tactics.

"We see only the tip of the iceberg," said Robert Hayes, the organization's president.

The problem is that the government failed to establish an effective, seamless process for those who opt out of private plans called Medicare Advantage, Hayes said.

Regional Medicare offices around the country are the first point of contact for his agency, Hayes said.

"Each office plays by different rules in helping people. Literally, different people in the same office play by different rules," Hayes said. "It can be weeks, it can be five or six months even when we are involved. And these are skilled, passionate advocates who take on these cases."

Jeff Nelligan, a spokesman for the Centers for Medicare and Medicaid Services, said the agency will let seniors enroll in another plan even after the open enrollment season has passed if they were misled or given incorrect information. They should call 1-800-Medicare to see if they qualify, he said.

However, Sen. Gordon Smith, R-Ore., said Friday that his staff found the Medicare hot line of limited use. He said they called the number several times on June 17 out of concerns about a backlog in disenrollment claims.

There, they were greeted with long wait times, and a "dizzying array" of responses about disenrolling. The average wait time for calls successfully completed by his staff to 1-800-Medicare was 12 minutes. Many others never got through, Smith said.

Nelligan said the average wait time for all calls made to 1-800-Medicare on June 17 was 32 seconds. He said the wait for speaking to an operator was shorter than usual. Calls that didn't get through may have been a result of local telephone network problems, not problems on CMS's end.

As to the "dizzying array" of responses that Smith said his staff received, Nelligan said the agency takes reports of problems very seriously and works quickly to resolve them.

"We are looking closely at the concerns of Senator Smith in the same manner," Nelligan said.

Smith, the top Republican on the Senate Aging Committee, said his staff is investigating reports of lengthy backlogs in the processing of disenrollment claims. He blamed part of the problem on Medicare officials not accepting some disenrollment files from the insurers.

"It is unacceptable for a Medicare beneficiary to wait up to three months to cancel their enrollment in an MA plan," Smith said.

Smith asked for copies of call center scripts relating to disenrollment from private Medicare plans, as well as all guidance, advisories and other instruction letters issued on the topic.

Nelligan said agency officials believe it's important to note that more than 8 million people are enrolled in Medicare Advantage plans, and the agency has logged just 2,700 complaints in the past four months about the plans, a strong track record.

In recent months, federal officials have said agents for some Medicare Advantage plans have used unscrupulous tactics to enroll seniors.

In Georgia, for example, the state insurance commissioner reports that one agent was arrested for fraud after allegedly signing up 10 residents at a home for the mentally disabled. Two other agents were arrested for conspiring to defraud seniors after they allegedly signed up people without their knowledge. They're also accused of signing up dead people.

Seven of the leading companies offering a particular type of managed care plan for seniors, called private fee-for-service, have agreed to suspend the advertising of their plans until they fully implement new marketing requirements.

Meanwhile, Young said she continues to get mail from her old insurer: Last week's letter started out "Dear Member." The letter requested some basic health information so the insurer could better serve her.

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[Jun 11, 2007]

      In the second report in a three-part series on uninsured children, ABC's "World News" on Sunday examined how paperwork and administrative delays can prevent families from enrolling eligible children in state health insurance programs. According to "World News," some parents and children's advocates maintain that states "deliberately increase the red tape to save money."

Ron Pollack, executive director of Families USA, said, "If a state is having a fiscal problem, they do one of two things: they lower the eligibility standards, or they establish administrative impediments that prevent eligible people from enrolling. This is a question of money."

In Texas, which has the highest rate of uninsured children in the U.S., the state has hired experts to help families complete paperwork to enroll in state health insurance programs. The state Legislature recently passed a bill that would reduce some of the paperwork, which is expected to result in another 100,000 children enrolling, but the governor has not yet signed it. "World News" also talks to several people who have had trouble enrolling children in health coverage programs (Harris, "World News," ABC, 6/10).

Video of the segment and expanded ABC News coverage are available online.