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Florida Blue: Rates Will Increase 20 Percent Without Cost Sharing Reductions

Leon County Judge John Cooper on June 30, 2022, in a screen grab from The Florida Channel.
Florida Blue
The Florida Channel
Leon County Judge John Cooper on June 30, 2022, in a screen grab from The Florida Channel.

Florida Blue will file its proposed rates for the Affordable Care Act marketplace this week and officials warn they could increase by 20 percent if the federal government stops funding the cost sharing measures that are included in Obamacare.

The company will continue to offer health insurance in all of Florida's 67 counties and is required to file its rates with the state on Wednesday.

Health News Florida sat down with Tony Jenkins, Central Florida regional market president for Florida Blue, to discuss what might happen if Obamacare changes. 
There's a lot of uncertainty in the health care market right now. What went into Florida Blue's decision to continue offering plans in the marketplace?

Well, since 2014, we have been offering plans on the marketplace in all 67 counties in the state. It's a part of our mission. We are dedicated to serving all Floridians. So we wanted to make sure that since Obamacare and health care reform was the law of the land, we were committed to making sure that we were offering affordable products. Even though they were going to be offered through the exchange, the marketplace, we were going to be there because we were mission-based statewide organization.

Florida Blue is filing its 2014 rates with the Office of Insurance Regulations. Can we assume that premiums are increasing again as they have in years past?

Well, we're going to be filing rates just like all the other health plans and they're going to be submitted -- everyone has until June 21. So we are not able to really release what those rates are going to be yet. They all come out by the OIR after the 21st. So we don't yet know what what those rates are going to be yet -- all are going to be publicized after the 21st.

With so much uncertainty about the future of health care right now what went into determining the 2018 rates?

Well every year, as as we all know, there's consumer inflation that happens throughout the whole country. There's also, within the medical space, there's medical trend which is nothing more than inflation itself. So every year, that's always a factor in how we present our rates and what add it to our products. So every year, it's different medical trend. I know back 10 years ago was it was an 11 percent increase. Last year, medical trend in the country was down to almost 6 percent. Now that doesn't translate equally over into what an increase in products are going to be. That's just a part of how we look at offering rates across the state.

So when you say medical trend, what do you mean by that?

So medical trend is really when you factor in overall the cost of goods and services across an industry. So it could be a matter of new technologies. It could be what's happening as it relates to provider cost throughout certain counties within the region itself. So it's just the general increase of the cost of goods and services that take place within our industry.

The 2018 rates are based on the assumption that cost sharing reductions will be in place next year. First, can you explain what we mean by cost sharing reductions?

Sure. You know it's such a struggle for individuals to meet a lot of their out-of-pocket costs. So we're talking about deductibles, co-insurance, co-payments. Cost Share Reductions are nothing more than a discount that lowers the amounts that individuals have to pay for these various programs. What cost reductions also provide is it lowers their out-of-pocket maximums. So when you think about the total amount that folks have to pay for their medical services per year, when someone reaches their out-of-pocket maximum, the insurance company will cover 100 percent of all those covered services. So cost reductions also reduces their out-of-pocket maximum.

And at the end of the day there were over 1.2 million folks in Florida -- 70 percent of all of that enrollees were eligible to receive last year these cost share reductions. So without these in place, it really reduces the ability for a lot of individuals in the state to purchase health care insurance.

These are different than subsidies, right?

Correct. Absolutely. Subsidies are really on the front end -- a lot of people call them premium subsidies. So this is where individuals get help to pay for their monthly premium costs. And then on the other end that I just mentioned, cost share reductions are nothing more than another type of subsidy, but it really just helps support individuals with their out-of-pocket costs.

What happens to Florida Blue's rates if these cost sharing reductions go away under a new health care proposal?

Well, as I mentioned, as we file our rates if cost share reductions are not approved then we know that our rates are going to increase probably 20 percent above whatever our submitted rates are going to be. And again, we're just trying to make sure that cost share reductions are taken seriously and approved because if not, if that's not going to happen, then we're not going to be able to help those individuals access affordable plans, and more importantly, the quality of care that they need.

If rates go up by 20 percent and people begin dropping their insurance because they can't pay, will Florida Blue be able to stay in the marketplace?

Well, again, that's something that we are not able to assess and determine. Our commitment and our intent is definitely to stay in all 67 counties. But we are absolutely watching to make sure that we understand the decisions that are going to come out of Washington related to the approval of these. One thing we do know though is that if they are not approved, then we know we know what our rates are going to show that 20 percent increase. And we just are not sure, we don't know about our ability to take a look and see what our current staying power is. But our goal and intent is to remain in each county.

What would force Florida Blue out of the marketplace?

We are dedicated and committed to serving individuals within the state. And I don't see a scenario where we are necessarily not going to find solutions to serve Floridians and to be able to offer affordable plans. As I mentioned before we know what our rate increases would be without cost sharing reductions. But  I don't see any declaration for us to say that that we are not going to remain serving Floridians through marketplace plans.

Florida Blue has invested so much in Florida's market based on requirements in the Affordable Care Act. If Obamacare goes away, what does Florida Blue's individual plans look like?

Well, we are definitely in talks with legislators in both Tallahassee and in Washington. We know that the American Health Care Act is being discussed and has gone through the House approvals and we know it's going through the Senate. I would just tell you that we are going to make sure that we are working with whatever administration is in place. And our goal is to make sure that we are presenting products that are going to be affordable to meet the needs for folks to be able to not continue to be in the ranks of the uninsured. And we know that there's a cost element and an affordability element that's critical. So I would just say that it's our desire and goal to continue having the levels of conversations with all of those decision makers in our industry, be it providers, hospitals, legislators to make sure that we're meeting the needs of those that we serve.

Julio Ochoa is editor of Health News Florida.