House Green-Lights Revamp Of 'Out-Of-Whack' State Employee Insurance Program

Mar 20, 2014

Florida lawmakers tinkering with the state employee health insurance program are poised to revamp the entire system. If the proposal is okayed by the legislature, it’s uncertain whether state workers would see their insurance costs go up or down.

Representative Jason Brodeur (R-Sanford) says the state health insurance program is outdated and doesn’t give employees what they want. Brodeur says workers who have chosen the state’s HMO plan get more benefits, yet pay the same rates as those on the state’s PPO plans, which have fewer.

“If you talk with anyone in the industry including Representative Murphy...she will tell you just how far 'out-of-whack' is the technical term that we are in both our offerings and take-up rates," he said Tuesday during a House Health and Human Services Committee as he unveiled a massive revamp of the state employee health insurance program.

Brodeur claims such inequity is a situation unique to Florida and, "that tells us a couple things. It tells us we’re not offering what people want, and we’re not offering the kind of value we could have to our state workers.”

Representative Amanda Murphy (D-New Port Ritchey) is a financial advisor with the firm Raymond James.  She points out the cost to state employees is far lower than what coverage would cost in the private sector:

“For instance, a $30,000 salary out in some corporations, the cost of the healthcare is $300 for a family or more, versus the $180 it is here. That’s what I’m talking about. These are tax dollars, these belong to the taxpayers of Florida," she said in explaining her support for the proposed changes.

Backers of the plan say there should be a difference in cost for employees that go with less-expensive coverage. He also argues the change is necessary to account for the growth in how much the state is spending on state employee health benefits. In the past decade, the cost to the state has doubled to more than $15,000 a year for family coverage—while the employee contribution has remained the same at  $2,160 a year.

The bill would also direct the state to establish tiers of coverage by 2017 —similar to those in the federal Affordable Care Act--with bronze, silver, gold and platinum levels. The state would contribute a fixed amount of money toward the purchase of a plan, and the employee would pitch in the rest. Employees could pay more for higher-value plans, or pocket the savings if they choose smaller ones.

The proposal also creates a pilot program in up to three counties to establish market pricing for some common procedures. The costs would be posted on the state health insurance website. The goal is to make state employees shop around. If an employee chooses a less expensive place to have a procedure done, that’s more money in their pocket. If the procedure is performed in a place that charges more than the market rate, the patient would have to pay the difference. But House Health and Human Services Committee Chairman Gary Corcoran stresses the pilot is voluntary:

“It’s carefully crafted...it’s three regions, and the providers in that pilot are the contracted providers we already have in our existing plans. It’s not like we’re incentivizing them to go down to Dr. Jones by the river in the cabin to get a heart surgery for five-grand and pocket the rest. It’s not happening.”

But it does concern Ponte Vedra Beach Republican Representative Doc Renuart. He says as a doctor, he’s liable for where he refers a patient, and believes the less-expensive option is not necessarily the best one.

“I don’t make a referral based on the lease expensive, I do it on quality, because I am held to that standard," Renuart said. "And there should be some protection if a patient selects the less-expensive option on their own, that those who have advised them otherwise will not be held to that responsibility that the patient should have.”

Representative Mia Jones (D-Jacksonville) cast the lone “no” vote on the bill. Jones noted the state has made several changes to the state health insurance program in recent years and she thinks lawmakers should wait to see how those play out before doing more. The state expects to spend nearly $2 billion on health insurance for more than 173,000 policyholders in the current fiscal year.