MedPartners’ Marci Wilhelm, chief compliance officer, speaks during a healthy living workshop, an in-service employee lunch, conducted by the Holistic Network Tampa Bay.

TAMPA Marci Wilhelm is not a fan of big government.

Still, Wilhelm, chief compliance officer at MedPartners HIM, wants to know who is keeping an eye on the double-digit rate increases for health insurance that her Tampa staffing company provides for its workers.

She was dismayed to learn Kevin McCarty, Florida’s insurance commissioner, rescinded acceptance of a $1 million federal grant that was intended to strengthen the review process for proposed rate hikes as part of health care reform legislation. It’s one of several similar moves by Florida officials in the wake of a Jan. 31 federal judge’s ruling that upheld the state’s legal challenge to the Patient Protection and Affordable Care Act. Although the final outcome likely will be up to the U.S. Supreme Court, Florida Gov. Rick Scott has said the state will not spend a lot of time or money to implement the law.

Florida is one of a handful of states to reject federal money designed to implement reform. Political and judicial posturing held less interest than practical concerns for Wilhelm and 10 other Bay area businesswomen who gathered for a panel discussion just after the one-year anniversary of the reform measure. Many said health benefits are their largest single business expense after payroll, and they are worried they won’t be able to continue providing coverage if premium costs continue increasing. For some of the businesswomen at the discussion, organized by the Florida Consumer Health Action Information Network, providing health benefits to workers is beyond their capabilities. Employees at their firms get insurance from spouses or other family members, have individual policies or go without. Others are grappling with rising costs.

Tampa Crossroads Inc., a nonprofit that helps homeless veterans, pays 85 percent of the cost of insurance for its 28 full-time workers. The organization had an 18 percent jump in premium rates in 2010 and a 20 percent-plus increase this year, said Sara Romeo, executive director. “It’s almost to the point where we are reluctant to hire people full time,” she said. “It’s not the salary. It’s the cost of insurance.”

A disconnect between rates and claims

MedPartners’ premium costs jumped 22 percent this year, even though the company was told by its broker that the money its insurer paid out in medical claims for workers was lower than the average payout on medical claims for similar firms. The double-digit increases don’t surprise John Fraser, president of Fraser Benefits Consulting LLC and a 30-year industry veteran, who said small firms don’t have as many options or bargaining clout as bigger companies. The Florida Office of Insurance Regulation currently reviews rate proposals for individual and small employer group policies, said spokesman Jack McDermott. Agency staff determine whether the proposed rates are excessive, inadequate or unfairly discriminatory. The office must accept a rate filing if it complies with the law and is adequately supported by actuarial justification.

The grant that Florida rejected would have provided funds to expand the review process to large employer group policies, McDermott said. It could have been used to develop technology to combat insurance fraud, or to enhance transparency by posting online rate requests by insurers, according to the U.S. Department of Health and Human Services. In rescinding acceptance of the grant, McCarty cited HHS criticism for Connecticut insurance officials for approving a rate increase of as much as 47 percent for Anthem Blue Cross and Blue Shield. “We hadn’t drawn down the money, we were concerned about its encroachment on state sovereignty, and yesterday’s decision just made it a cinch,” McCarty said, one day after U.S. District Judge Roger Vinson ruled the Affordable Care Act was unconstitutional.

Not widely reported

Seven weeks later, most of the businesswomen at the CHAIN discussion were just finding out about the grant and its rejection. Anton Gunn, HHS regional director, urged them to share their stories with state regulators. Wilhelm sent an e-mail to McCarty, questioning the rejection of the rate review grant and of a separate request to allow Florida to waive reform legislation rules that set thresholds for medical loss ratios, or the percentage of premium dollars insurers have to spend to provide medical care. The federal minimums are higher than those currently in place under Florida law. In asking for permission to waive the rules until 2014, McCarty said at least four insurance companies indicated they would stop writing some individual policies if they had to meet the federal medical loss ratio standards right away.

“Who’s side are you on?” Wilhelm asked in her email to McCarty. “If insurance companies want to withdraw from Florida market coverage because they are forced to show premium increases result in better care, we probably don’t want them as vendors in the first place. Someone up there needs to start advocating for the businesses or there won’t be any companies left to purchase insurance.” McCarty said in the waiver request that fewer insurance companies in the state would result in less choice for consumers.

The federal rule on medical loss ratios would require insurers and HMOs in the individual and small group markets to pay out at least 80 percent of their premium revenue for medical care and quality improvement this year, or give rebates to consumers starting in 2012.
Florida Insurance Commissioner Kevin McCarty asked that the requirement be delayed until 2014. Until then the current state requirement would remain in place, calling for insurers to pay out 65 percent of their premium revenue for medical care and quality improvement and HMOs to pay out 70 percent.
— Margie Manning

 Source: Tampa Bay Business Journal – by Margie Manning, Senior Staff Writer