HCAN Asks HHS to Hold Public Hearing on Florida Plan to Rob Families of $140 Million in Health Insurance Premium RebatesPosted on October 26th, 2011 by Melinda Gibson in Press Releases
For Immediate Release - OCTOBER 27, 2011
Contact: Avram Goldstein 202-587-1634
Washington, DC - Health Care for America Now (HCAN), the nation's leading grassroots health care advocacy organization, has asked the Department of Health and Human Services to hold a public hearing on the state of Florida's request to be exempted from rules that would require insurance companies to send $140 million in premium rebates to families. Under the Affordable Care Act (ACA), health insurers that fail to spend at least 80% of premium revenue on actual health services must give back the difference to consumers. Florida's submission to HHS failed to provide any evidence that the MLR would destabilize the health insurance market and does not warrant a special exception from HHS.
"At a time when insurance companies are making record profits and families are struggling to make ends meet, taking away rebates from consumers is unjustified and unconscionable," said Ethan Rome, HCAN's executive director. "The state offers no justification for its proposal to undercut this pro-consumer regulation. If the state of Florida gets its way, consumers will lose $140 million in rebates and insurance companies will get that money instead."
Other states have asked HHS to let their health insurers spend more than the maximum 20% of their premium revenue on profits, CEO pay, marketing, lobbying and administration. But Florida stands alone in seeking an adjustment on such a massive scale. HCAN believes that an open hearing as permitted by recently adopted HHS regulations would serve the public interest and expose the substantial flaws in Florida's request. If approved, the hearing would be the first of its kind.
According to HCAN's letter to the Department, 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.
Florida's request emerged from a highly charged political environment. Prior to his election, Florida Governor Rick Scott led an industry-backed campaign against passage of the ACA, and the governor has since refused to implement various provisions of the law. Insurance Commissioner Kevin McCarty has consistently been opposed to a meaningful rule on how much insurers must spend on actual health care. He led an effort to weaken the pro-consumer rule at the National Association of Insurance Commissioners.
Governor Scott made his personal fortune at the helm of a hospital company that systematically defrauded federal health care programs. The company pleaded guilty to 14 federal felonies and was forced to pay a record $1.7 billion in criminal fines and civil penalties to the Justice Department. In 2009, with financial help from right-wing billionaires Charles and David Koch, Scott used his high-profile opposition to health reform legislation as a springboard to the governorship.
The insurance commissioner has been working for more than a year to deny these rebates to consumers, beginning in September 2010 with a sham hearing that he submitted to HHS as evidence supporting the Florida request. This state hearing was an invitation-only showcase for insurers and brokers to attack the rule, and consumers were denied the right to testify on the record.
"Florida's insurance commissioner should be using this law is to lower premium increases, not to gouge consumers," Rome said. "The goal is to lower premiums not reward companies that can't compete. The governor and the commissioner should spend less time opposing the law and more time implementing it so consumers get premium relief."
To read HCAN's letter to Secretary Sebelius, click here.
Health Care for America Now is the nation's leading grassroots health care advocacy organization. HCAN led the fight over the past two years to win passage of health reform and to keep Congress from being steamrolled by corporate special interests.