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Florida Board of Medicine Public Meeting

July 19-20, 2008, 9:00 a.m., Jacksonville
Hyatt Regency Jacksonville
225 East Coastline Drive
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Board of Hearing Aid Specialists Public Meeting

July 26, 9 a.m., Miami
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August 13, Ft. Lauderdale
Signature Grand
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Top Story

House council proposes e-marketplace for insurance

 By Christine Jordan Sexton
3/11/2008 © Florida Health News
TALLAHASSEE – What if the state created a Web site where consumers could shop for no-frills health insurance? The House Health Care Council, chaired by Rep. Aaron Bean,  meets today to begin drafting such an electronic health insurance market.  Background documents released last week show that the Council’s plan would:

  • Let employers offer “cafeteria plans” that are approved under IRS rules. The plans, can cover a wide range of benefits, including health care, dental care, vision care, dependent care, adoption services and elder care. The plans are usually accompanied by flexible spending accounts, which allow people to defer taxable income to help pay for health care services. 
  • Remove the 51 “mandates” that Florida law requires health policies for small employers and individuals to cover.
  • Allow competition by insurance companies, managed-care organizations and a new type of plan called “provider-sponsored networks.” PSNs are groups of doctors and hospitals that collaborate to offer coverage without an insurance middleman.
  • Give shoppers more information about costs and quality and make it easier to compare plans.
  • Be priced using three factors: age, gender and location.

According to the draft report, the idea is to make health insurance more affordable for those who are now priced out of the market -- mainly those who work in small businesses or are self-employed.

Florida has one of the nation’s highest rates of uninsured among its non-elderly population, according to several studies. Part of the reason is price: A November 2007 report by America’s Health Insurance Plans showed Florida’s cost of insurance for a family was $10,848 in the small group market, well above the national average of $9,768.

House Speaker Marco Rubio said he is “very excited” about Bean’s proposal. Florida Chamber of Chamber of Commerce lobbyist Joana Bonfanti said the group is still polling its members on the House Healthcare Council proposal but that in general, the association supports market-based approaches to health reform.

“We think that is really exciting, and we look forward to working with the council, the governor’s office and the Senate on ideas like these,” said Bonfanati.

But Bob Parr, vice president of sales and marketing for Tallahassee based Fringe Benefits Management, says he thinks the industry already provides competitive prices for this type of plan.  Parr said the idea of a government-endorsed agency facilitating the purchase of health insurance reminds him of Florida’s ill-fated experiment with community health  purchasing alliances in the early 1990s.  

The plans described in the council report would have to meet the tax requirements laid out by the Internal Revenue Service so pre-tax dollars can be leveraged to their fullest.  To ensure success the state may have to provide incentives for insurance companies and PSNs to participate, such as paring back premium taxes or the amount that hospitals pay in Public Medical Assistance Trust Fund assessments, the so-called “sick tax.”   
 
The electronic marketplace plan differs from the proposal by Florida Gov. Charlie Crist, which would have the state acting as negotiator on behalf of the uninsured and insurers would bid for the business. Crist’s plan would require companies to take all comers, regardless of health risk, while the Bean plan would not,
.
To attract participants, the initiative could be targeted toward part time state employees who don’t have benefits and to retired state employees under 65 who are at risk of being uninsured because of increasing health insurance premiums costs. Employers that purchase the plans could also receive some incentive, such as a reduction on business taxes. Employees could receive some tax rebate, although the report doesn’t make clear how that would work.
 
The interim study states that the program could be administered either by a state agency or a private corporation established in statute.  The state could also hire a third party administrator through competitive bidding.  And while start-up funding will be necessary the report concludes that “eventually the marketplace should become self-sufficient, funded through fees paid by participants.”
 
Ultimately, the e-insurance marketplace should serve employers like a “centralized human resource department—managing the offering of multiple choices, payments of premiums and other related functions.”