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Cuts To Obamacare Subsidies Will Cost Florida Blue Millions This Year

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’s largest provider of health insurance under the Affordable Care Act responded today to the federal government’s decision to stop funding subsidies that keep costs low for some consumers.

Florida Blue, which covers nearly a million of the 1.4 million consumers on Obamacare marketplace health insurance plans in Florida was prepared to offset the loss of subsidies in 2018, but not this year.

The subsidies, called Cost Sharing Reductions, help lower copays and deductibles for people with modest incomes.

Florida Blue and other marketplace insurers assumed the subsidies were going away next year. That's why the average rate increase among the six companies offering plans in 2018 was 45 percent.

But they didn't anticipate losing hundreds of millions of dollars, in the last four months of this year. The insurers haven’t seen a payment for the subsidies since August.  

Florida Blue spokeswoman Christie DeNave says the company will have to cover that loss.

"We will make no changes to our existing ACA plans for 2017 and we are going to absorb the financial impact of that decision," DeNave said in prepared statement from the company.

In 2016, insurance companies received $1.3 billion in Cost Sharing subsidies from the federal government.

The cost sharing subsidies are different than subsidies that the federal government pays to keep premiums low. Those subsidies will continue in 2018, so the average consumer who buys a plan through the marketplace should see only moderate increases. Some may even see slight decreases in their premiums, according to filings with the state.

The following is Florida Blue’s complete statement:  

“With close to a million Affordable Care Act, or ACA, members Florida Blue remains committed to providing them access to high quality and affordable health care.

Despite the federal government's announcement that it will no longer fund Cost Sharing Reductions, or CSRs, we will make no changes to our existing ACA plan through 2017 and we're going to absorb the financial impact of that decision.

After careful analysis of the market and our ACA membership last month we filed rates with the Florida Office of Insurance Regulation, assuming the CSRs we're not going to be funded in 2018.

With the OIRs approval, we chose to increase the rate of our highly subsidized silver plans. By our estimate, more than 90 percent of Florida Blue marketplace members should have modest premium increases for next year or will see a slight reduction in premiums due to increased subsidy levels.

We are actively engaging with our non-subsidized members to try to align them with off the marketplace plans that will have similar benefits with more affordable premiums.”

Julio Ochoa is editor of Health News Florida.