Florida, Feds Battle Over What Health Insurance Rates Will Be Next Year

Aug 8, 2014

Credit LHatter / WFSU News

Florida insurance officials expect the cost of health insurance plans sold on a federal exchange to increase by an average of 13 percent next year. But not everyone agrees price hikes will be that steep and critics are questioning the state’s methods for calculating the increases.

The state’s estimated 13.2 percent health insurance rate increase is receiving pushback from Affordable Care Act advocates, who say it’s another example of the state’s resistance to the federal health law.

“The reality is, for most of the folks who use the marketplace, those rate increases we hear about are not going to apply to them personally," says Greg Mellowe, Policy Director for the healthcare advocacy group, Florida CHAIN. He argues the way the state calculated health insurance pricing for the upcoming year is misleading.

“It’s just an analysis. The marketplace will still be working. The primary factor in determining what an individual or family pays is their income and the plan they choose. Those things will not change despite the examples OIR [Florida Office of Insurance Regulation]  chose are not representative of the vast majority of the people who will be doing that purchasing.

The state’s analysis shows an individual making about $27,000 a year who qualifies for a federal subsidy would pay around $200 a month for their insurance. For example, according to the state right now that person pays $166  a month for subsidized health insurance. It would increase by $37 next year.

“As the former elected insurance commissioner of Florida 15 years ago...If I didn’t think a rate hike was justified, I would cut it," says U.S. Senator Bill Nelson, D-Florida.

Nelson is also critical of OIR’s math. During a stop in Tallahassee to endorse North Florida Congressional Candidate Gwen Graham, Nelson said the state abdicated its duty to regulate insurance rates.

“The state legislature took away the power of the insurance commissioner, so is it any wonder the health insurance companies are jacking its rates up now? Interestingly, the Republican legislature is blaming this on ObamaCare," he says.

The Florida Office of Insurance Regulation used an average of all the mid-level silver plans sold on the exchange to come up with an average rate hike for consumers. More than 70 percent of the people who purchased their health insurance from the federal exchange, purchased a silver plan. The federal government is saying costs for most Floridians will go down. And it’s basing its analysis on population centers and the fact that most people purchased cheaper silver plans. A June report from the U.S. Department of Health and Human Services says most of the 984,000 people who signed up qualified for federal subsidies and are paying $68 a month for their health insurance.

Regardless of whether costs are going up, or down, at least one thing is certain. Floridians will have more choices when it comes to companies.

"We do expect to offer a wide array of quality, innovative products ...to all Florida residents regardless of their life situations and stages," says United Healthcare spokeswoman Elizabeth Calzadillo-Fiallo.

United Healthcare is one of three companies entering Florida’s insurance exchange market. United is gearing up to offer its products on the federal exchange after sitting out the first year. The company wanted to wait and see how the exchange would pan out before getting involved, and Fiallo says it had always been in the plan that United would participate.

“We’re just making good on that promise of broader participation, not just in Florida but elsewhere as well.”

Bottom line: some Floridians will pay more for their health insurance. Some will pay less. It depends on where you live, how old you are, and what you make. And to find out what you’re costs will be, you’ll have to wait until October, when open enrollment on the federal insurance exchange resumes.