By Ethan Rome - Executive Director, Health Care for America Now
Florida Gov. Rick Scott wants to cheat the families of his state out of $140 million in health insurance rebates. If Scott gets his way, it could harm consumers across the country.
Ripping off consumers and the health care system isn't new to Florida Gov. Rick Scott. He got rich leading a hospital company that paid a record $1.7 billion in criminal fines and civil penalties to the Justice Department for systematically defrauding federal health care programs. Scott went on to lead a high-profile campaign against health reform backed by the infamous right-wing billionaire Koch Brothers, and Scott used that campaign as a springboard to the governorship.
Now Scott wants his state to be exempted from federal rules that would require insurance companies to send $140 million in premium rebates to families over the next three years. Enter the big winners, the health insurance companies that will get the money instead of Florida's hard-working families.
Under the Affordable Care Act (ACA) enacted last year, health insurers that fail to spend at least 80% of your premiums on actual health services must give the difference back to consumers. This is one of the best and possibly least known provisions in health care reform. It requires insurance companies to become more efficient and keep less money for profits and CEO salaries. It says that people paying premiums should get more value for their money.
The goal of the rule isn't to force companies to pay consumer rebates, it's to hold insurance companies accountable and get them to change their behavior. But if they don't, they're supposed to pay, and they shouldn't get off the hook just because they like their profits more than the new law. They should not be rewarded for failing to meet a basic standard because they can get politicians like Scott to take their side.
And let's not forget the most important thing: While insurance companies are making record profits, struggling families are desperate for relief. The people of Florida need the $140 million they're owed. But consumers won't get their money if Rick Scott gets his way. The Republican governor — who's been doing everything in his power to thwart implementation of the ACA — has been shamelessly trying to manipulate the law to pad the pockets of a private health insurance industry that will collect $934 billion in premiums this year.
Florida Insurance Commissioner Kevin McCarty is doing Scott's dirty work. McCarty is a staunch opponent of the ACA who recently led an unsuccessful effort to gut the 80% rule at the National Association of Insurance Commissioners. For his efforts, the National Association of Health Underwriters honored McCarty with the "Spirit of Independence Award." So the insurance industry can count on the insurance commissioner.
McCarty recently asked the U.S. Department of Health and Human Services (HHS) to give Florida's insurance companies special treatment. In order to get an exemption to the 80% rule, a state is supposed to meet some basic criteria, principally proving that its insurance market would be destabilized by the rule.
Florida doesn't meet any of the criteria, and its application to HHS fails to provide any supporting evidence. As Health Care for America Now (HCAN) detailed in a letter to HHS, the state offered no evidence that insurers would leave the state market, that consumers would have to do without the services of agents and brokers, or that anyone would go without coverage due to the rule. That's why HCAN asked HHS to reject Florida's request. Other national groups and 19 Florida health care and consumer organizations have done the same.
HCAN also asked HHS to hold a public hearing. Such a hearing would be the first of its kind — and the first opportunity for Florida's consumers to have any input on their state government's attempt to rob them of $140 million. It would also force the insurance companies seeking this special treatment to publicly face the consumers who will lose the millions of dollars they're entitled to under the ACA.
The Patient Bill of Rights in the ACA is about stopping insurance company abuses, and the 80% rule is an important part of it.
If Florida can get an unjustified exemption to this rule, it would send the message that anything goes, that the rule doesn't really matter and that insurance companies and the Republican politicians they own are in charge. We're counting on HHS and the Obama Administration to do the right thing and deny Florida's bogus request.