After two years with its regulatory hands tied, the Florida Office of Insurance Regulation is free this year to challenge insurers again — in a market seeing double digit hikes.
A 2013 law barred the Florida Office of Insurance Regulation from regulating proposed rates in Affordable Care Act plans, stating that the state office could not have a final say over federal laws and regulations such as the ACA. That meant the office spent the first two years of the ACA’s enforcement in review-only mode, determining if rates were in compliance with state and federal rules but unable to act if they weren’t.
That law expired this year.
Insurance office staff actuaries will now be able to review the insurers’ proposed changes and have the final say in whether the proposals are justified, said Harvey Bennett, spokesman for the office. If not, insurers will have to file new rates or, in certain cases, may appeal the decision.
The office will look at plan benefits and wording as well as check for discriminatory rating practices to ensure that rates are justified and comply with with Florida and federal law.
What the office’s reestablished role this will mean for consumers is still unclear. The office refused to comment on the subject.
But consumer advocacy groups such as Florida CHAIN, a nonprofit that supports the ACA, said the reinstated regulation capabilities will likely spell good things for consumers.
Laura Brennaman, health policy consultant with Florida CHAIN, said consumers will likely save millions of dollars thanks to rate review protections, which under the ACA are meant to be the role of state regulators.
“We are hopeful and optimistic that the OIR [Office of Insurance Regulation] will safeguard the healthcare consumers in Florida by maintaining a transparent review process and granting rate increases only where they are required to provide high quality healthcare to subscribers,” Brennaman said in an email.
Greg Mellowe, health policy director for the Florida Center for Fiscal and Economic Policy, a nonpartisan nonprofit, said the insurance regulation office’s reinstated role, after having their powers restricted for two years, will likely help consumers in the long run.
It can only help, he said, “for them to be able to do the job that they should have been able to do all along.”
And Florida’s insurance regulator is regaining its rate review authority just in time. Insurers are requesting double digit increases, with Aetna seeking the highest with a proposed 21.22 percent hike on ACA plans.
Like other Florida plans that proposed hikes, Aetna cited rising health costs as the key impetus behind the rates.
“U.S. healthcare spending is on track to grow from $2.9 trillion in 2013 to $5 trillion in 2022,” said Walt Cherniak, a spokesman for Aetna and Coventry. “The rates that we are filing simply reflect the costs of healthcare including the cost of services, the amount of services people will receive and an increase in pharmaceutical costs.”
Coventry, too, is proposing raising ACA plan rates by 16 percent.
Insurers with rate increases over 10 percent were required to report them to the federal government and justify their proposals.
Cigna, with an increase of 12.82 percent, said part of its justification for the jump comes from the data insurers now have on the newly insured ACA population.
“As our understanding of the specific clinical experience, needs, claims and medical trends of our individual customers becomes more extensive, Cigna continues to refine its offerings so that our health plans are more closely aligned with the needs and preferences of the communities we serve,” said Cigna spokesman Joe Mondy in a statement.
Other plans with increases greater than 10 percent included United Healthcare (18.19 percent) and Preferred Medical Plan (14.5 percent.) Missing from the mix was the state’s largest insurer: Florida Blue.
For 2015, Florida Blue proposed increases averaging 17.6 percent on its exchange plans. The proposed 2016 rate will increase by less than 10 percent but the company chose to keep the actual rate under trade secret protection citing competitive reasons.
Still, the proposed rates for many of the companies will likely change before they are finalized at the end of the summer.
Miami Herald reporter Daniel Chang contributed to this report.
This story was produced in collaboration with Kaiser Health News, an editorially independent program of the Kaiser Family Foundation.