A disrupted health care market in Florida

A cornerstone of the Affordable Care Act is the new health care exchanges that will sell insurance online to individuals and small businesses. The law requires that these exchanges sell plans to everyone, no matter their health, and at regulated prices. Some people may also be eligible for subsidies to offset the cost of buying health coverage.

Florida, along with 33 other states, has opted to let the federal government run its health exchange. It will come online Oct. 1. The exchanges are intended to promote competition among insurers .

The government has begun a marketing campaign to educate insurance buyers and set up call centers to answer questions about the exchanges; one center is in Tampa.

Many businesses complain that the government has been slow to explain the Affordable Care Act — hence the Obama administration’s decision in July to delay implementation of a provision of the law that requires large employers to offer health insurance.

Florida Blue intends to offer plans on Florida’s federally run health exchange. It says it can’t afford not to in order to protect its dominance in the individual insurance market in Florida.

Eight other health insurers have filed documents with the state that indicate they may compete for customers on the exchanges, though not all are expected to follow through. Those insurers include Aetna, Coventry Health Care Plan, Cigna and Florida Health Care Plan.

Nationwide, 120 health insurers have filed plans to offer insurance on the marketplace, and most states have at least five insurers competing for business. But not all insurers are jumping into these exchanges. Kaiser Health News reported in June that UnitedHealth Group recently disclosed to investors it would only offer plans in a dozen states after previously saying it would sell on 25 exchanges. Cigna will focus on five states and Aetna on 14 states, Kaiser reports.

The individual market is seen as high-risk and unstable, and the exchanges initially are expected to attract older and less healthy customers.

“I think what we are seeing is some of our national competitors are taking a wait-and-see approach,” Altmire says. “They pick and choose markets they want to participate in.”

Even health insurance companies that don’t offer commercial insurance, dealing only with government-sponsored programs such as Medicaid and Medicare, are closely watching the exchanges and the Affordable Care Act.

Lourdes Rivas, CEO of Simply Healthcare Plans, says the new health care exchanges pose more competition for her Medi-caid members. That’s because Medicaid eligibility can change from month to month. “These people who lose Medicaid may then qualify to receive subsidies on the health care exchanges,” Rivas says.

She’s worried she will lose customers to insurers that are on the health exchange and is considering expanding into the individual insurance market.

For some businesses, such as insurance brokerages, the exchanges offer new competition for customers [“Opportunity Amid Uncertainty”]. For small businesses, the exchanges can mean a new way to shop for health insurance. And for large employers or employees with health insurance through their employer, the health exchanges mean very little if the employer already offers health insurance plans that are affordable and meet the minimum standards of care.

Most of the 7.9 million Floridians who have employer-sponsored insurance, about 52% of insured Floridians, won’t see major changes, but employers may ask them to pay for more of the cost of their insurance.

Tags: Healthcare, Insurance, Insurance Overhaul