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Out-of-state insurers may get into FL

With supporters arguing it would make coverage more affordable, lawmakers began considering a bill Wednesday that would open Florida to stripped-down health insurance policies from other states.

The bill, which was approved by a House subcommittee, could undergo major changes in the coming weeks. But at a minimum, the proposal refueled a long-running debate about whether coverage requirements --- known as "mandates" --- drive up the cost of insurance in Florida.

"If you cannot afford the insurance, it's pretty meaningless to have mandates in the first place,'' said Rep. John Wood, a Winter Haven Republican who is sponsoring the bill.

Three Florida insurance-industry lobbyists reacted cautiously to the proposal, at least in part because of concerns that it would put in-state insurers at a disadvantage. But they said they like the bill's idea of eliminating mandated coverages.

"We support this concept (of targeting mandates),'' said Paul Sanford, a lobbyist for Blue Cross and Blue Shield of Florida. "This is something we think the state really needs.''

The bill would open up the Florida market to individual insurance policies that have been allowed in other states. Florida would not regulate the rates of those out-of-state policies and also would not impose other types of requirements, such as the mandates.

Officials from the Office of Insurance Regulation did not address the House Health & Human Services Access Subcommittee during Wednesday's meeting. But a bill analysis by the subcommittee staff said OIR is concerned that the measure would allow out-of-state insurers to sell minimally regulated policies in Florida.

"OIR expresses a concern that it has no authority to regulate the actions of an out-of-state insurer offering health-insurance products within the state,'' the analysis said. "OIR is also concerned that out-of-state insurers could offer policies within the state to only healthy individuals, leaving an uneven risk pool for Florida insurers.''

Wood said the bill has consumer safeguards, including a requirement that the out-of-state policies would be sold only through insurance agents.

Florida has one of the highest percentages of uninsured residents in the country, with nearly 4 million people lacking coverage. Individuals and small businesses have been routinely hit in recent years with double-digit rate increases, which has exacerbated the problem.

The House subcommittee voted 10-5 to approve the bill, with Republicans supporting it and Democrats dissenting. But even with the vote, Wood acknowledged the bill is a "work in progress" that could change.

Without changes, the bill would allow out-of-state insurers to sell cheaper policies than companies such as Blue Cross and Blue Shield of Florida, which still would be subject to the state regulations.

Michael Garner, president of the Florida Association of Health Plans, said the key is creating a "level playing field'' in the insurance industry. That could translate into trying to reduce mandates on all insurers.

Florida law includes at least 49 mandates, which have long been criticized by the insurance industry. The number of mandates in other states vary from 13 in Idaho to 69 in Rhode Island, according to a report by the Council for Affordable Health Insurance.

The mandates require insurers to cover a variety of health conditions and treatments, ranging from diabetes to mammograms. Former Gov. Charlie Crist created a program, known as Cover Florida, that allowed insurers to sell barebones policies, but the program shut down early this year after attracting relatively few customers.

When asked about Cover Florida during the meeting, Wood drew a distinction between private insurers selling policies and what he described as the government trying to create low-mandate policies that consumers didn't want.

It was not immediately clear how the bill might get changed in the coming weeks. But Garner said his industry group has proposed setting a July 2012 expiration date for the mandates --- a process known in the Legislature as "sunsetting" them.

Under that proposal, lawmakers would create a task force to review every mandate, looking at issues such as how much they cost and how much the mandated treatments are used. The Legislature then would decide before the July 2012 deadline which mandates should be re-enacted.

The possibility of allowing out-of-state policies would be delayed until after the review is finished.

--Capital Bureau Chief Jim Saunders can be reached at 850-228-0963 or by e-mail at