Florida passes bill to boost private health coverage for uninsured

The state hopes to foster development of new, affordable options for uninsured individuals and small-business employees.

By Doug Trapp — Posted June 2, 2008

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Florida lawmakers early last month adopted a bill that aims to increase access to affordable health coverage by allowing insurers to offer plans not subject to state benefit mandates.

Under the legislation, private health insurers would contract with the state through a new program called Cover Florida to offer coverage options to anyone who has been uninsured for at least six months. Eligibility would be faster for people who have lost their jobs. The bill would require the state to approve at least one statewide plan.

In addition, the measure would allow insurers and other companies to offer more flexible insurance options and other products geared toward businesses with 50 or fewer employees through a new initiative called Health Choices. These products also would be exempt from insurance mandates. About 3.8 million Floridians lack health coverage.

The Florida Medical Assn. supports the legislation, which Gov. Charlie Crist is expected to sign. "If this is done right, you'll vastly increase the number of insured patients and give them things like catastrophic care they need and perhaps preventive services they want," said David McKalip, MD, an FMA board member and chair of its council on medical economics.

The Florida Assn. of Health Plans' 21 members are excited about the new flexibility the bill would provide by exempting the new plans from the state's health benefit mandates, said Jim Bracher, the association's executive vice president. "The idea that you could develop a plan that would be more tailored to the kinds of things that your potential customers would want, we believe is a big plus."

Florida has about 50 health coverage mandates, which take two forms: requirements for specific benefits, such as well-child care, and for services by certain health care professionals, Bracher said.

Still, the legislation would require that insurers participating in Cover Florida offer two types of plans: one with catastrophic and hospital insurance, and one without.

The bill, expected to be implemented in 2009, emphasizes flexibility over government control. A new entity, the Florida Health Choices Corp., would oversee the program for small businesses. The 15-member body would develop standards for insurers and other companies to meet, and review the new offerings they develop. One product possibility is prepaid cards for health clinics, said Rep. Aaron Bean, chair of the House Healthcare Council, which oversees health care legislation.

"This is really bringing free market principles to health care," Bean said. "We're going to see when government gets out of the way what the free market can do."

Under the legislation, all plans would be offered to people no matter their medical history, a requirement known as "guaranteed issue." However, the bill would not prohibit the exclusion of coverage of new enrollees' preexisting conditions for a certain period after enrollment, said Bracher.

Crist and other state leaders have said Cover Florida could result in premiums as low as $150 a month for health plans with an array of basic, preventive care. Bracher said requiring the plans to be guaranteed issue will make that goal more difficult to reach.

The bill is expected to initially cost only $1.5 million, with all of that for starting the Health Choices Corp. and its Web site, where consumers would be able to access information about the new plans and products. The state would not subsidize any of the new health plans or products nor require employers to offer health benefits. Instead, the bill calls for tax credits for employers who participate in the Health Choices program.

The legislation represents a compromise between House leaders on one side and Crist and the Senate on the other. The Senate and Crist favored Cover Florida only, but the House wanted to adopt both Cover Florida and Health Choices. "[At first] they didn't understand the Health Choices plan," Bean said. But two days before the legislative session ended, the two camps reached an agreement.

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Florida acts to cover uninsured

The Florida Legislature recently adopted a bill with two systems to offer affordable private health plans and other products to the state's approximately 3.8 million uninsured people. The bill would:

  • Create Cover Florida, a marketplace for a variety of basic, unsubsidized, guaranteed-issue, portable health plans for adults who have been uninsured for at least six months and are not eligible for public programs.
  • Exempt plans in Cover Florida from most state benefit mandates. However, the plans would have to cover at least office visits, prescription drugs, surgery, preventive care and durable medical equipment.
  • Require insurers in Cover Florida to offer at least two types of plans, one with catastrophic and hospital coverage, and one without.
  • Establish the Florida Health Choices Program, a way for businesses with 50 or fewer employees to give workers new options for using tax-exempt dollars on health plans, prepaid services, flexible spending accounts and other products. Employers are not required to financially contribute or even to participate, but the bill would allow businesses who do participate to receive tax incentives to be specified later.
  • Create the Florida Health Choices Corp. to oversee the introduction of these new products.

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