Florida Health Insurance Advisory Board Reviews Enrollment, Premium Data; Commissioner McCarty to Return $1 Million Federal Grant
Feb 2, 2011
Chaired by Florida Insurance Commissioner Kevin McCarty, the Florida Health Insurance Advisory Board met yesterday, February 1, 2011, to hear updates on the health insurance market and federal healthcare reform.
While it was reported that there have been no remarkable changes to the health insurance market over the last several years, there have been some noteworthy occurrences, such as a 12 percent decline in enrollment of the large group market from 2008 to 2009.
Even with falling enrollment, the large group plan market saw modest increases in premiums, while the loss ratio rose to 89 percent. Falling enrollment, it was explained by Florida Office of Insurance Regulation (“OIR”) staff members, was most likely due to the increasing premiums, coupled with the ability of large group plan participants to realize cost savings through self-insuring.
Small group plan enrollments remained flat, due to small group plan participants’ inability to realize cost savings through self-insurance. Small group plan premiums were down slightly, while the loss ratio for this market was up to 81 percent. Individual plan enrollment increased, likely due to an increase in eligibility for the HIPPA guaranteed issue market.
In the individual market, both premiums and the corresponding loss ratio have remained steady.
The OIR staff members present at the meeting indicated that there is likely to be upward market pressure on premiums for both large group plans and small group plans.
They also provided a briefing on this week’s decision by Judge Rodger Vinson of the U.S. District Court of the Northern District of Florida in holding the federal healthcare reform act unconstitutional. Judge Vinson ruled that the individual insurance mandate portion of the legislation was unconstitutional because it equated to the Congressional regulation of inactivity.
Traditionally, Congress has used its powers under the U.S. Constitution’s Commerce Clause (Article I, Section 8, Clause 3) to regulate commercial activity. In his decision, Judge Vinson said that only the U.S. Supreme Court could expand Congressional powers under the Commerce Clause to regulate inactivity. He also ruled that the federal healthcare reform was not volative of the 10th Amendment because Medicare participation is voluntary for states.
Further, he ruled that the individual mandate portion of the legislation was not severable because it was material to other material portions of the law. Allowing severability would essentially be a judicial rewrite, Judge Vinson explained.
Commissioner McCarty said that the OIR will take Judge Vinson’s ruling into account, while deciding whether to file with the federal government for adjustment of the Medical Loss Ratio.
He also indicated that he has informed the U.S. Department of Health and Human Services that the OIR will not accept a $1 million federal grant to conduct rate reviews. He explained that he was concerned that accepting the funds would lead to an encroachment into Florida’s sovereignty as it pertains to health insurance regulation.
Should you have any questions or comments, please contact Colodny Fass.