Executive says if cost-share reductions are left out of new health care law, it could make “coverage unaffordable for quite a few.”
Blue Cross and Blue Shield of Florida Inc., the state’s largest health insurance provider, will increase rates if cost-share reduction and tax subsidies in the Affordable Care Act don’t carry over to new health care legislation being debated in Washington.
Darnell Smith, Blue Cross and Blue Shield of Florida market president for North Florida, said if those cost-share reductions and tax subsidies are left out of the next health care law, the company would raise rates by 20 percent.
“If those go away, the coverage that we provide could become unaffordable for quite a few folks,” Smith said.
Smith said if customers decided not to buy insurance because it was too expensive, it would put additional short- and long-term financial strain on the overall health insurance market, causing rates to rise.
Cost-share reductions, or CSRs, help pay for deductibles, co-pays and other out-of-pocket expenses for lower-income Americans who sign up for individual plans through the state’s health insurance marketplace.
Smith said about 1 million of the company’s 5 million customers purchased an individual plan through the state marketplace this year.
Floridians can buy coverage through the state exchange if they don’t receive insurance through their employer or another government program.
Smith said about 70 percent, or 1.2 million people, who purchased individual plans with Florida Blue and other health insurance companies in the state qualified for cost-share reductions.
According to the Centers for Medicare and Medicaid services, that number is around 6 million nationwide. The center is part of the U.S. Deparrtment of Health and Human Services.
Smith estimates about 90 percent of Floridians with individual plans also receive federal tax subsidies to help cover the cost of premiums.
“A loss of those subsidies would be a major impact for our members,” Smith said.
Jacksonville-based Blue Cross and Blue Shield of Florida, which operates by the trade name Florida Blue, filed its proposed 2018 rates for individual plans with the Florida Office of Insurance Regulation on June 21.
Smith said the company didn’t include a rate increase because the company “assumed the Trump administration would keep CSRs in place.”
Through email, a spokeswoman for the Florida Office of Insurance Regulation said the review process will be completed by Aug. 16.
After that, the office would determine the timeline for issuing a news release with the names of all companies and the rates approved for both individual and small group products.
“The office reviews each filing to determine whether the proposed rate is reasonable in relation to the benefits offered by the plan; rating practices are not unfairly discriminatory; and, contracts and other forms are free from ambiguous, misleading or deceptive language,” said deputy director of communications Karen Kees.
One of the main criticisms from opponents of the 2013 law, also known as “Obamacare,” has been rising costs for individuals and insurance companies.
While other large insurers have left health care exchanges across the country, Florida Blue announced in June it would stay, making it the only provider that covers all 67 Florida counties.
In several counties, Florida Blue is the only provider.
Smith said Florida Blue understands those cost concerns, but has no immediate plans for leaving the marketplace.
“If we wanted to only look at places where we could be profitable, we certainly could, but that’s not our mission,” Smith said. “We want to make it really clear that we’re going to be there, in all 67 counties.”
Senate Republicans offered their plan June 22 to repeal and replace the Affordable Care Act. The Senate plan includes cuts to Medicaid and changes to who qualifies for federal tax credits to purchase health insurance.
According to the Congressional Budget Office, under the Senate plan, financial aid for consumers would stop at 350 percent of the poverty level, or $42,000 a year, compared to 400 percent, or $48,000 a year, under the Affordable Care Act.
Also, critics of the Republican plan claim subsidies would be tied to the cost of less comprehensive health plans in a person’s area, meaning consumers could receive less care for their money.
Smith said he hasn’t read the entire Senate version, but that “Florida Blue has people on the ground in Washington, D.C., to provide information and answer questions the administration might have moving forward.”
He said he’s confident Congress and the Trump administration will keep those cost-share reductions in place.
“If not, there would be a lot of people that would be uninsured, and therefore would not have access to care like we think they should,” Smith said.