With the end of this legislative session a mere two weeks away, state lawmakers are no closer to implementing a state health insurance exchange program that is mandated through the Affordable Care Act. And, as the deadline for the mandate looms, the state risks having the federal government step in and create a program in place of the state.
Last week, ten states received another round of federal grants aimed at aiding the implementation of state-operated health insurance databases that would allow citizens to shop around for insurance. As the Affordable Care Act (ACA), was signed into law in 2010, all states must create these programs, as part of a federal mandate. The law stipulates that states complete this task before 2014.
According to the law, states will have to prove to the federal government by January 2013 that they will have a functioning state exchange by 2014. If they cannot, the law requires that the federal government come in and create an exchange in place of the state.
Throughout Florida’s 2012 legislative session, state lawmakers have not held a single meeting in which plans for an exchange have been discussed. In fact, the only legislation that has been discussed regarding the exchanges has been a memorial “urging Congress to defund the health insurance exchanges required by the Patient Protection and Affordable Care Act.”
Because the state is the lead plaintiff in a legal challenge to ACA, it remains unlikely that the GOP-led Legislature will move at all – until the U.S. Supreme Court rules on the state’s challenge. Kaiser Health News reported back in December that Florida remains one of three states currently claiming that they “flat out… won’t establish exchanges of their own.” Gov. Rick Scott has said publicly that he does not believe the health care reform is “the law of the land,” and will not implement it until the Supreme Court decides to uphold the law. The Supreme Court will begin hearing the challenge in March.
During a town hall hosted by Florida health advocates last November, Anton Gunn, the regional director of the U.S. Department of Health and Human Services, expressed frustration with the state of Florida for falling so far behind in implementing mandates from the health care reform law. Mostly, he said, the state was acting as if Affordable Care Act was not currently in place.
“This is the law of the land,” Gunn said. “Everyone needs to remember that.”
Democratic lawmakers in the state have shared this frustration.
State Sen. Nan Rich, D-Sunrise, and Rep. Mark Pafford, D-West Palm Beach, introduced legislation this year that would set up a Florida health insurance exchange program, as required by law, in the hopes that it would at least create discussions about why the state was falling so far behind.
Senate Bill 1640 and House Bill 1423 would provide the intent to “establish a state-level health benefits exchange by a certain date; providing minimum functions for such exchange; establishing the Florida Health Benefits Exchange Legislative Study Committee to consider and make recommendations regarding the establishment of the exchange; providing that the act is null and void if that part of federal law requiring an exchange is repealed or replaced.”
While both bills have been referred to committees, neither has been heard in a committee this entire session.
Pafford warns that the state “is not ramping up fast enough… in the event that they do not prevail in court.”
The longer lawmakers wait, say critics, the more complicated the process may become. A public policy research group warned state officials last year that delaying implementation of federally-mandated health policy changes in the state could “compound” the challenges they might already face.
Pafford says that projections of the effects of the bill’s implementation in the state already shows some savings. However, he explains that legislative leaders are not interested in doing anything that may be “damning to their lawsuit” before the Supreme Court’s ruling.
“Oddly, this may trigger the federal government’s intervention,” he says.
The GOP-led Legislature in Florida has spent much of the last two years decrying the federal government’s role in regulating the state’s public health programs. Pafford says the very lawmakers denouncing government intervention in the state’s programs could very well be initiating more involvement.
If the state were to try to play catch-up at any point, however, lawmakers would also be facing some unique problems.
The state of Florida currently has one of the worst rates of un-insured residents in the country. According to the 2010 Census, Florida had the third highest percentage of residents without insurance. The 2010 Census information (.xls) finds that from 2008 to 2010, Florida’s average percentage of uninsured people was 20.7 percent. The national average for uninsured citizens was 15.6 percent.
The situation, it seems, is not improving. According to a report from the Florida Health Insurance Advisory Board released last December, the number of people in Florida with private health insurance has continued to decline.
Another report, released last year by the Henry J. Kaiser Family Foundation, found that Florida’s insurance market could also make the process of creating exchanges more difficult. The report found that the individual and small group health insurance market in Florida is “highly concentrated.” According to a 2010 report (.pdf), individuals who shopped for health care insurance that year faced a market in which four insurers had more than 5 percent of the state’s market share. The market share of the state’s largest insurer at the time (based on enrollment) was 49 percent.
For small groups, the situation was not much better. In 2010, four insurers had control of more than 5 percent of the state’s market share in 2010. The state’s largest insurer had a 40 percent market share. The report explained that states currently making “important policy decisions as they implement new insurance market rules and deciding whether and how to operate exchanges…may be influenced by how competitive a state’s insurance market is perceived to be.”