TALLAHASSEE, Fla. - insurers writing small group health insurance plans in Florida must take all comers as of Jan. 1, under a plan aimed at stemming legislative support for play-or-pay and universal access proposals.
The success or failure of the plan to make health insurance coverage available to employers with between three and 25 workers now rests largely with the industr, said Kenny Shipley, who heads the Department of Insurance bureau overseeing the project.
'This is an opportunity for the industry to resolve thc health care access problem without going into a universal access system,' Ms. Shipley said.
The department has approved the policy forms for the required 'standard' and 'basic' plans. While premiums will vary bv carrier, standard coverage provided through HMO-based plans is expected to run about $76 per month for individuals and about $190 per month for families. Standard coverage for similar plans offered through carriers is expected to run about $150 per month for individuals and about $375 for families. Basic coverage may run 10 percent to 15 percent below the cost of standard policies.
The questions now are: Will insurers write the policies, given the guarantee issue mandate, and 11 employers buy them?
Prudential Vice President and Assistant Actuary Nick Simonelli said he believes the plans will result in a 'noticeable improvement' in access to the insurance marketplace. 'The industry has got to put its best foot forward and work together to solve this problem,' he said.
Mr. Simonelli serves on the board of directors of the Florida Small Employer Health Reinsurance Program with representatives from Humana Health Plans, Celtic Life, John Alden Life, Blue Cross and Blue Shield of Florida, CIGNA and Travelers.
He said that while he believes these companies are committed to making the program work, he fears that others may not play by the game rules in an attempt to avoid high-risk groups and individuals.
'It is very important that this be successful, because if this doesn't work, somebody else has to come up with something else,' Mr. Simonelli said. '|Somebody else' could be the state or federal government and |something else' could be the Canadian plan. There is a weakness in what (the health insurance industry) is doing, and we have to be part of the solution.'
But Chicago-based Celtic Life President Howard Bolnick does not share Mr. Simonelli's optimism about the outcome. 'Clearly, this was set up as the industry's last chance,' he said. 'I am very unconvinced about where we're going to end up.
'Nobody that I know of has been successful at selling stripped-down policies. What people generally mean when they talk about a basic plan is that they want to have full benefits at a price that doesn't match the benefits,' he said.
CIGNA Vice President for Government Affairs Dayid Mannis said he is concerned that Florida's basic plan may contain too many benefits to be affordably priced for evervone who might seek coverage. 'I think that if this plan does not produce a great deal of coverage, it will encourage the state to play a much more direct role in the system,' he said.
Under the plan approved by lawmakers, insurers must designate themselves as 'risk assuming' or 'reinsuring' prior to entering the marketplace. Reinsuring carriers will pay reinsurance premiums. Should the amount collected in reinsurance premiums fail to cover losses, a two-tier assessment mechanism would come into play, first spreading the losses among those in the small-group market and then looking to all health insurers as the funding source of last resort.
A number of state-sponsored plans for high-risk indixiduals have sunk under their own weight and required huge bailouts by the state and by the industry. Mr. Simonelli said he doesn't think the potential exists for the same problems in the reinsurance fund. 'We're not going to run a deficit program,' he said.
The reinsurance board is not expected to receive recommendations from its actuaries on reinsurance premium levels until its Nov. 9 meeting in Tampa. That is considered a complicating factor by insurers, many of whom are holding off declaring their risk status until the premiums are known.
The plans approved by the insurance department include the following:
* Physician services, 80/20 coinsurance (standard indemnity), 60/40 with the first $150 not subject to coinsurance or deductibles (basic indemnity), $10-$25 co-payment per visit or per procedure (standard HMO), $10-$50 co-payment per visit or per procedure (basic HMO), with non-surgical back treatments to 10 visits in all policies.
* Hospital services, 80/20 coinsurance (standard indemnity), 60/40 coinsurance (basic indemnity), $100 per dav, days 1-5, with the balance paid at 100 pereent and a $50 co-payment per procedure for outpatient surgical care (standard HMO), $250 per day, days 1-5, with the balance paid at 100 pereent and a $100 co-payment per procedure for outpatient surgical care (basic HMO).
Maternity services arc covered the same as any illness under all of the plans. All provide some level of coverage for mental and nervous disorders, but none covers alcoholism and chemical dependency. There is no coverage for home health services, prescription drugs or skilled nursing facilities under the basic plans. The basic indemnity plan has an annual deductible of $250 per person and an annual calendar year maximum benefit of $50,000. The standard indemnity plan has an annual deductible of $500 and a lifetime policv maximum of $1 million.
