Health insurance rates in Florida will rise by 5 to 20 percent in the small-group market, and 30 to 40 percent in the individual market, as the Affordable Care Act’s guaranteed coverage rule takes effect next year, Florida’s insurance commissioner said Monday.
It’s a measure of how tough Florida’s insurance market has been for adults with pre-existing conditions that the state’s rates will rise so much for individuals, Insurance Commissioner Kevin McCarty said in an interview with The Palm Beach Post. McCarty said the impact on people with large-group insurance will be negligible.
One by one, states have been releasing details on how their insurance premiums will be set as the Affordable Care Act’s key provisions go into effect. Maryland and New York have seen rates for 2014 fall, while Indiana, Ohio and Florida are seeing increases, particularly in the individual market.
McCarty said there are two forces driving Florida’s individual and small-group rate increases: Starting next year, people with pre-existing conditions — illnesses like diabetes, cancer, hemophilia or a heart defect, for example, — can no longer be locked out of health coverage for their conditions here. Other states have already required insurers to make provisions for those consumers.
Second, the health act requires insurers to provide a basic minimum plan, which it turns out in many cases is more comprehensive than what has been sold in Florida. Insurers had often carved out of their health plan items like maternity and childbirth coverage, or physical therapy and speech pathology services. Those are deemed “essential benefits” under health reform next year.
Eleven insurance carriers have filed to sell plans in Florida’s individual insurance exchange marketplace in 2014, McCarty said. Five have filed to sell plans to small groups via the exchange. A list of those carriers, along with details on their plans and premiums, will be on the state insurance Web site at http://www.floir.com after Wednesday, McCarty said. Wednesday is the deadline for states to approve policies to be sold in their exchanges.
Eleven insurance carriers have filed to sell plans in Florida’s individual insurance exchange marketplace in 2014, McCarty said. Five have filed to sell plans to small groups via the exchange.
Health insurance becomes mandatory beginning Jan. 1, and the plans are to go on sale in October, so there has been great anticipation over what the new regulations mean for rates.
The insurance plans to be sold in Florida will be offered on a county-by-county basis, at the state’s request. Some Florida counties will have as few as two plans for consumers to choose from; and in some cases, they will originate with a single insurance company, Florida Blue and its subsidiaries.
In Palm Beach County, individuals buying through the federal exchange will have seven carriers to choose from, while small group buyers will have two choices, McCarty said.
“Virtually anyone with a pre-existing condition over a certain age found it impossible to get coverage for that condition,” in Florida in recent years, McCarty said.
States like California, New York, Maryland and Massachusetts aren’t seeing the same rate shock as they release next year’s rates, because they didn’t have as far to climb to meet the mandates of federal health reform.
“Most states of Florida’s size had a guaranteed issue plan,” McCarty said. “Florida closed its in 1991 and it hasn’t been open since, so this makes a big, big difference in Florida.”
People’s actual rates will vary significantly by the individual, their circumstance, their smoking status and where they live, he added, and some people will see rates go down, especially those middle-age and older who have been ill.
The Affordable Care Act eliminates insurance rate discrimination based on gender and health status, and it narrows the price gap between young and old. That’s good news for people who are older and sicker, but will hit younger, healthier people in the wallet.
Cheryl Fish-Parcham, deputy director of health policy for the consumer health advocacy group Families USA, said it’s important to remember that subsidies, in the form of tax credits, will lessen the impact for most middle-class people, those who earn between one and four times the federal poverty rate, which is $11,490 for an individual and $23,550 for a family of four in 2013. Families USA estimated that more than 1.7 million Floridians will be eligible for the insurance subsidies next year. People will be able to apply for their subsidy at healthcare.gov beginning in October and have them applied to their 2014 monthly premiums, she said.
It is the “young indestructibles” the state’s insurers will most need to purchase coverage, to keep rates affordable for everyone else. But next year’s tax penalty for not buying insurance is comparatively low, $95 per adult, or 1 percent of income, whichever is greater, a source of concern for many in the industry.
Florida has 3.9 million uninsured, and it’s hard to say how many of them will heed the coverage mandate.
“So much of the success of the act depends on people who are not now buying health insurance deciding to go and buy it on the exchange,” McCarty said. “That’s one of the biggest question marks of this whole equation.”
Staff writer Charles Elmore contributed to this story.
MANDATORY HEALTH INSURANCE
Wednesday is the deadline for states to approve next year’s insurance plans. On Jan. 1, health insurance becomes mandatory and insurers can no longer exclude pre-existing conditions. Consumers can begin buying coverage and applying for subsidies in October.