Florida Moving to Work on Implementing Health Care Law

By Stacey Singer, The Palm Beach Post

The U.S. Supreme Court has ruled, President Barack Obama has won re-election and a majority of Florida voters rejected Amendment 1, the effort to etch into the state constitution a permanent ban on mandatory health insurance.

With the Affordable Care Act more certain than ever, some lawmakers are calling for a careful look at how to implement it here. Even Florida Gov. Rick Scott, a staunch opponent, appeared to be softening his longstanding refusal to acknowledge the law.

“Just saying ‘no’ is not an answer,” he said in a statement released by his press office late Friday. “We need to focus on how Obamacare affects each of our families,” he said, adding he is concerned about the impact for cost, access and quality of care.

“I am looking forward to working with legislators and others on specific ways to address these issues,” he said.

The U.S. Department of Health and Human Services has given states reason to set up and operate the online marketplaces where consumers will buy insurance starting next fall. States with their own exchanges will have more leeway to decide how much coverage plans sold on the exchanges must offer. More generous base benefits likely would raise the cost of premiums, though.

“I am concerned about how it affects patients, jobs and taxes on Floridians,” Scott said.

On Wednesday, hours after Republican presidential candidate Mitt Romney had conceded, Scott sounded a more combative tone, saying it would cost too much to expand Medicaid and set up health insurance exchanges.

“No one has been able to show me that that health care exchange is going to do anything rather than raise taxes, raise the cost of our companies to do business,” Scott told the Sarasota Herald-Tribune.

In July, he told Fox News: “We’re not going to implement Obamacare in Florida. We’re not going to expand Medicaid.”

The health care law requires consumers to carry insurance beginning in 2014 — a little more than 13 months from now — or pay a penalty. That coverage will be purchased through online health marketplaces, if consumers lack employer-provided insurance, Medicaid or Medicare. Some who can’t afford insurance will be eligible for subsidies.

If Florida doesn’t establish its own online marketplace, the federal government will do it for the state. The deadline for governors to decide on running their own state’s insurance exchange is Friday. States planning to do so must supply a blueprint by Dec. 14.

Some state policymakers want to keep options open. Some private companies suggest they could create and run an exchange on behalf of the state. Meanwhile, the federal health agency will allow hybrid models, with the U.S. government responsible for the information technology element, and state regulators in charge of dictating the types of plans sold.

That would require the legislature to act in the 2013 session. But the Florida Legislature doesn’t convene until March — a time when insurers should be finalizing the plans they intend to sell next year.

Sen. Joe Negron, R-Stuart, said he doesn’t want to rush the process.

“This has enormous implications for our citizens, for our budget,” Negron said. “The decision should be made by the entire legislature.”

Industry experts say the runway may now be too short for Florida to land such a complex project.

Even states working on it for years aren’t ready. So far, just over a dozen states conclusively have said they will run their own online insurance marketplace.

The biggest changes of Obamacare are about to hit. Denials based on pre-existing conditions will be against the law in plans that will go on sale in October.

Meanwhile, people who buy health insurance through an exchange will be able to select among a handful of standardized, easier-to-understand plans.

If Floridians buy their insurance on a federally run exchange, benefits that are often not covered, such as maternity care and mental health, automatically will be part of all plans, along with preventive coverage for such things as vaccines and cancer screenings. And consumers will have a right to appeal insurance company decisions.

Questions remain. What will be the role of insurance brokers? How will they get paid? What would constitute discrimination? Can chiropractic care be substituted for physical therapy? More guidance is expected from Health and Human Services in the coming days.

Negron, a leading Senate voice on health care budget issues, wants more information. He is concerned about the federal grants that Florida may be leaving on the table — potentially hundreds of millions of dollars.

Additionally, if the legislature fails to pass a bill conforming state insurance law to federal law, health insurers will have to seek plan approvals in two separate places, insurance industry experts said.

Without action from the legislature, consumers with problems may have some types of disputes mediated in Tallahassee, but most will have to seek help in Washington. It’s a recipe for confusion, said Mila Kofman, a Georgetown University research professor who is working with states to implement the new health law. She’s a former insurance superintendent for Maine.

“You do have potentially a dual system,” Kofman said. “It’s not good for anyone. There’s no need to have two regulators when one is perfectly competent.”

Time is now short, she said. The law was passed in 2010. States were given years to assemble their plans, but as many as 30 may not be ready, because they expected the Supreme Court or the presidential election to lead to the law’s repeal, Kofman said. Her phone is now ringing off the hook.

The Robert Wood Johnson Foundation is supporting technical assistance to states. Kofman is an adviser for that program. She has assembled checklists for state’s planning to run health insurance exchanges.

The list has 10 big-picture items, including setting up a governance board, conforming state with federal law and building the information technology backbone to connect insurance companies as well as Medicaid systems, while offering a retail interface to everyday consumers.

“These IT systems are very, very sophisticated and very complex,” Kofman said. “That is probably the biggest challenge for the states, because no one before the Affordable Care Act had anything like it.”

The health law says the U.S. government will subsidize the health premiums of people earning up to four times the federal poverty rate, or about $45,000 for an individual, so verifying income will be a key part of the system.

Negron said he’s been told that upgrading the state’s computer systems could be enormously expensive, and it’s something the federal government potentially would pay for right now, if the state sets up an exchange.

Having a more modern system could improve the management of not just the insurance exchange, but also Medicaid and the Department of Children and Families, he said. So Negron wants more information before closing that door.

Florida has an estimated 4 million uninsured residents.

“What is best for Floridians who need our help, and how can we make sure that our budget lives within its means?” Negron asked.

If Florida doesn’t act, the federal government will set up and manage insurance marketplaces for the state. There are two commercial vendors designing exchanges for every state that lacks a plan, a Health and Human Services spokesman said. They must be running by October.

Florida Blue (formerly Blue Cross and Blue Shield) was among the private companies prepared to help Florida launch its exchange, a company insider said.

“We had it all set up for them,” the insider said, “and they said no.”

Timeline

  • Friday: Governors must declare their state’s intention to create health insurance exchanges. If they don’t want to set up an exchange, the federal government will create one for them.
  • Dec. 14: States must submit blueprints for their exchanges, if they want to run their own.
  • Jan. 1, 2013: The U.S. Department of Health and Human Services will tell states if their blueprint is approved or “conditionally approved.”
  • Feb. 13, 2013: States planning to run an exchange with the federal government must say so.
  • Oct. 1, 2013: Open enrollment for 2014 health coverage.
  • Jan. 1, 2014: Nearly all Americans must carry health insurance. If they lack employer or government provided health insurance, they are to buy their insurance on exchanges.

Frequently Asked Questions

What is an insurance exchange?

People not insured by their employers or Medicaid will be able to buy affordable coverage in these online marketplaces starting Oct. 1, 2013. Anyone without insurance by Jan. 1, 2014, risks a penalty.

I don’t have health insurance. Will I have to buy it and what happens if I don’t?

Beginning in 2014, most people will have to have it or pay a fine. For individuals, the penalty starts at $95 a year, or up to 1 percent of income, whichever is greater, and rises to $695, or 2.5 percent of income, by 2016. For families it would be $2,085 or 2.5 percent of household income, whichever is greater. The requirement to have coverage can be waived for several reasons, including financial hardship or religious beliefs. Millions will qualify for Medicaid or federal subsidies to buy insurance.

I get my health coverage at work and want to keep my current plan. Will I be able to do that? How will my plan be affected by the health law?

If you get insurance through your job, it is likely to stay that way. But, just as before the law was passed, your employer is not obligated to keep the current plan and may change premiums, deductibles, co-pays and network coverage.

What other parts of the law are in place?

You are likely to be eligible for preventive services with no out-of-pocket costs, such as breast cancer screenings and cholesterol tests. Health plans can’t cancel your coverage once you get sick unless you committed fraud when you applied for coverage. Children with pre-existing conditions cannot be denied coverage. This will apply to adults in 2014. Insurers will have to provide rebates to consumers if they spend less than 80 to 85 percent of premium dollars on medical care. Also, there are no lifetime limits and children can stay on their parents’ policies up to age 26.

Some existing plans, if they haven’t changed significantly since passage of the law, do not have to abide by some parts of it. For example, these “grandfathered” plans can still charge beneficiaries part of the cost of preventive services. If you’re in one of these plans, and your employer makes significant changes, such as raising your out-of-pocket costs, the plan would then have to abide by all aspects of the health law.

I want health insurance but I can’t afford it. What will I do?

Depending on your income, you might be eligible for Medicaid. Most states now don’t allow nonelderly adults without minor children in Medicaid. But starting in 2014, the federal government is offering to pay the cost of an expansion in the programs so that anyone with an income at or lower than 133 percent of the federal poverty level, (currently $14,856 for an individual or $30,656 for a family of four) will be eligible for Medicaid. The Supreme Court, however, ruled in June that states cannot be forced to make that change.

What if I make too much money for Medicaid but still can’t afford to buy insurance?

You might be eligible for government subsidies to help you pay for private insurance sold in the state-based insurance marketplaces. Exchanges will sell insurance plans to individuals and small businesses. The subsidies will be available for individuals and families with incomes between 133 percent and 400 percent of the poverty level, currently $14,856 to $44,680 for individuals and $30,656 to $92,200 for a family of four.

Will it be easier for me to get coverage even if I have health problems?

Insurers will be barred from rejecting applicants based on health once the exchanges are operating in 2014.

I own a small business. Will I have to buy health insurance for my workers?

No employer is required to provide insurance. But starting in 2014, businesses with 50 or more employees that don’t provide coverage and have at least one full-time worker with subsidized coverage in the exchange will owe $2,000 per full-time employee. The firm’s first 30 workers would be excluded from the fee. Firms with 50 or fewer people won’t face any penalties. If you own a small business, the health law offers a tax credit to help cover the cost. Employers with 25 or fewer full-time workers who earn an average yearly salary of $50,000 or less today can get tax credits of up 35 percent of the cost of premiums. The credit increases to 50 percent in 2014.

I’m over 65. How does the legislation affect seniors?

The law is narrowing a gap in the Medicare Part D prescription drug plan known as the “doughnut hole.” That’s when seniors who have paid a certain initial amount in prescription costs have to pay all of their drug costs until they spend a total of $4,700 for the year. Then the plan coverage begins again. That coverage gap will be closed entirely by 2020. Seniors will still be responsible for 25 percent of their prescription costs. The law also expanded Medicare’s coverage of preventive services, such as screenings for colon, prostate and breast cancer, which are now free. Medicare will also pay for an annual wellness visit to the doctor. The law reduced the federal government’s payments to Medicare Advantage plans, run by private insurers as an alternative to traditional Medicare. Medicare Advantage costs more per beneficiary than traditional Medicare. Critics of those payment cuts say that could mean the private plans may not offer many extra benefits, such as free eyeglasses, hearing aids and gym memberships, that they now provide.

Will I have to pay more for my health care because of the law?

There are some new taxes and fees. For example, starting in 2013, individuals with earnings above $200,000 and married couples making more than $250,000 will pay a Medicare payroll tax of 2.35 percent, up from the current 1.45 percent, on income over those thresholds. In addition, higher-income people will face a 3.8 percent tax on unearned income, such as dividends and interest. Starting in 2018, expect a 40 percent excise tax on the portion of most employer-sponsored health coverage (excluding dental and vision) that exceeds $10,200 a year and $27,500 for families. The tax has been dubbed a “Cadillac” tax because it hits the most generous plans. Also, several major health industries, such as medical medical device manufacturers and importers, insurers and brand name drugs facts taxes and fees. Those costs will likely be passed onto consumers in the form of higher premiums.

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