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Gov. Charlie Crist got widespread support for a new law he signed on May 21 aimed at lowering the cost of health insurance, but consumer advocates are skeptical.

The law, known as Cover Florida, will allow insurers to offer stripped-down plans without any of the 52 mandated benefits currently on the books.

Supporters of the law figure that it’s better to have some health insurance than none at all, while consumer advocates question whether people will even buy the plans, and if they buy the plans, whether they understand exactly what they are getting.

Bill Newton, executive director of the Florida Consumer Action Network, believes the mandated benefits are too important to throw away in the name of lowering health insurance costs.

“The things that are covered by those mandates do occur,” Newton said. “For the folks that end up in these low cost plans, if something happens to them, then what? The governor got a pass on this. He’s going to have to accept the consequences if there are problems.”

The Florida Public Interest Research Group is taking a “wait-and-see” approach, said spokesman Brad Ashwell.

“We think the governor made a bold attempt to address the monstrous problem of Floridians lacking insurance,” Ashwell said. “We are watching and monitoring the progress of the program. We want to make sure people know what they’re getting, that they’re marketed appropriately.”

Insurers are allowed to offer bare-bone policies in 13 other states. Florida has tried them on a pilot basis, but they weren’t proven as popular as policymakers imagined.

“If people know they are getting stripped down policies it might just flop,” said Ashwell.

The law, nonetheless, has the backing of the Florida Medical Association with some caveats. “The Cover Florida plan is a good first step to ensuring that all Floridians have health insurance,” said Dr. Karl Altenburger, FMA president. “We feel strongly that in order for this plan to be successful, physicians must be consulted and engaged in the process. At the end of the day, physician participation is the key to any programs that cover the uninsured."

The law aims to bring the cost of an individual plan to around $150 a month, roughly 60 percent below the average current cost of health insurance in Florida, according to the Office of Insurance Regulation. The plans will be available to anyone who wants to buy one regardless of health status, a policy known as guaranteed issue.

The low-cost plans still must include preventive services such as office visits, screenings, most surgeries, prescription drugs, durable medical equipment and diabetes supplies. Some options offered by insurers also must include hospital coverage, though limits may apply. Insurers submitted bids in June.

The general idea for the legislation comes from the assumption, predominantly made by the health insurance industry, that benefit mandates increase the cost of health insurance. Florida is among states with the highest number of mandates in the country. Even this year, legislators added autism treatment to the list of mandated services. At the same time, Florida’s uninsured rate, at 20 percent, is also among the nation’s highest.

“We are 100 percent opposed to mandates,” said Sam Miller, spokesman for the Florida Insurance Council. “It doesn’t have anything to do with the need for these folks to get coverage. The way the system is set up, people wind up paying for mandates whether they want to or not.”

Benefit mandates are often driven by a coalition of providers, victims and advocates who believe that something such as autism or cochlear implants should be covered. “Who can argue with that? But nothing is free,” said Miller.

According to the Council for Affordable Health Insurance, a nationwide health insurance trade group, benefit mandates across the board increase health insurance between 20 and 50 percent. Each mandate may increase costs from less than 1 percent to as much as 10 percent, the group claims. Consumer advocates largely reject those findings. A study in Oregon found that its mental health parity law didn’t have nearly as much effect as insurers claimed.

“Insurers want to do what’s most profitable,” Newton said. “Mandates are a way for the government to protect people.”
 
 
 
July 2008

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