Health Insurance

FIC Backgrounder on 2008 State Initiatives to Expand Health Insurance, Including Governor Crist's Cover Florida.

Backgrounder on 2008 Health Insurance Initiatives

It's not 'bare bones'
Gainesville Sun, 8/9/2008
Charlie Crist

Cover Florida represents a first-of-its-kind approach to creating more affordable options for the uninsured in this state.

Perhaps because of its innovative framework and recent passage, many may still be unaware of the plan's underlying structure - a competitive negotiation process between state regulators and private insurance entities, with strict consumer protections and oversight surrounding all aspects of the plan.

Reports have criticized two aspects of the plan: First, that it does not provide state subsidies to low-income residents, and second, that the plan is 'bare bones,' leaving enrolled participants 'underinsured.' To the first point: Florida, like many states, is facing tough fiscal conditions. With tax dollars already strained, states have little opportunity for increased spending on subsidized programs. However, these conditions offer a chance to think creatively about how to provide greater options for residents to access coverage.

To the second point: Cover Florida policies are not 'bare bones.' Recent reports incorrectly describe Cover Florida as similar to Florida's Health Flex law. The two programs have major differences. Florida's Health Flex law contains income eligibility restrictions, is geographically constrained, and does not require insurance companies to provide in-patient hospital, out-patient services and surgery, and urgent and emergency care.

In contrast, the legislation creating Cover Florida delineates a strong set of benefits which must be covered. Further requirements are defined through the state's invitation to negotiate (ITN) process and will be outlined, through rigorous negotiations, in the eventual contracts with selected insurers.

Cover Florida permits the state to partner with competitively selected private health care entities to create robust, innovative health insurance products. The negotiating power of the state far surpasses that of any small business or group.

On behalf of the 3.8 million uninsured Floridians, the state has asked insurers to propose plans that offer quality benefits at a rate of about $150 per month or less. Only those plans selected through the bidding process will be awarded contracts to offer Cover Florida products to eligible Floridians.

Products developed through the negotiation process are not bound by the same mandated benefits and coverage limits required within the existing insurance code. Therefore, the process offers greater flexibility in the design of policies that could not exist in Florida's current regulatory structure. At the same time, proposals are strictly scrutinized and negotiated by state regulators.

This process maximizes product benefit levels, affordability and consumer protections.

Eligible Floridians will choose among various approved Cover Florida plans. The state is required to approve at least one insurer with a statewide plan and may approve regional plans as well. Further, all plans must offer two benefit packages - one with catastrophic coverage and one that provides preventive and primary care. All Cover Florida plans must cover preventive services, including immunizations, screenings, office surgery, behavioral health services, durable medical equipment, diabetic supplies, prescription drug coverage and more.

Instead of limiting the types of benefits offered, plans contain costs by limiting the quantity of services, such as number of days in the hospital that policyholders may utilize each year. For example, while many existing plans offer coverage for 365 hospital days a year, Cover Florida plans will provide for at least greater than the average stay. Initial discussions with insurers suggest that Cover Florida plans will far exceed such averages. Through negotiations, the state will assure that plans maximize the types of services and benefits they offer.

In any population, there will be those who cannot afford even basic health insurance products and those who can afford some but not the full cost of premiums.

For the former, alternative access systems must be developed - and in Florida, we are committed to doing so. Cover Florida, however, is targeted to the latter group: residents who wish to purchase meaningful health coverage, but are shut out of the private market due to soaring costs.

Cover Florida accomplishes the goal of expanding options for affordable coverage to Floridians at a time when the state's budget does not permit an expansion of subsidized programs for residents. Concerns about the level of benefits offered through Cover Florida demonstrate a misunderstanding of the plan's structure.

Through the competitive bidding process and the strict state involvement, Cover Florida will include meaningful and substantial coverage for Floridians who cannot afford coverage today.

Charlie Crist is governor of Florida
Florida Chief Financial Officer Alex Sink today urged Florida's self-employed individuals to take advantage of the August open enrollment period that allows single-group employers, sole proprietors,
independent contractors and others to obtain health insurance or switch plans on a guaranteed-issue basis. 

From an August 1 release by Florida Chief Financial Officer Alex Sink.


From an August 1 release from Chief Financial Officer Alex Sink:

From an August 1 release by Florida Chief Financial Officer Alex Sink.


From the Senate Banking & Insurance Committee.

Summaries of CS/CS/SB 2534, Cover Florida and Other Initiatives; and CS/CS/CS/SB 2654, Children with Disabilities.

Senate Summary of 2008 Health Insurance Access Legislation