"Every year, (the premium) is a shock," said Brooke Gast, who pays for her own insurance as owner of "Hype Group" PR and Marketing in St. Petersburg.
ST. PETERSBURG, Florida - There may be relief on the way for Floridians feeling the pinch from growing health insurance costs. Millions of dollars of refund checks are set to go out in upcoming months, but Florida is trying to delay those checks by three years.
The 2010 Affordable Care Act mandated that health insurance companies spend 80 percent of their premium revenues on medical uses (85 percent for large-group plans). That leaves the rest for profit and administrative costs like salaries, lobbying, and marketing.
While 2011 is the first year the "Medical Loss Ratio" (MLR) law will put refund checks into consumers' pockets, Florida is trying to delay implementation of the law. The state, which is also suing the federal government over the Affordable Care Act, wants to phase in the 80 percent threshold for individual policy-holders over the next three years. Small-group and large-group policies are not included in the appeal.
"Twenty percent seems like a pretty big chunk of money that doesn't actually go to medical bills, but to those other things that insurance companies do," said Blake Hutson from Consumers Union, the policy arm of Consumer Reports.
Read: Consumer Union Petition (.pdf), op-ed (.doc)
Hutson tells the 10 News Investigators that delaying the 80 percent threshold could cost Floridians up to $144 million in higher premiums and missed refund checks.
"Without this new protection (for consumers), it's business as usual (for insurers)," Hutson said. "It's the same lack of control over insurance rate increases, and it means real dollars and cents for families in Florida."
Read: Current Health Insurance Ratios (.xls)
Hutson added that while 17 states are taking advantage of the opportunity to appeal the law for individual policy holders, states like Florida - with a stable health insurance market and plenty of options - should not be appealing.
Florida's Office of Insurance Regulation declined an interview on the consumer issue because it was "political," but directed the 10 News Investigators to local insurance agents who say the law will force insurance companies to cut agents' compensation. Forcing agents out of the process could leave individual consumers vulnerable in the confusing world of health insurance-buying.
"If you reduce expenses, you're going to reduce services," said Ray Bouchard, president of Bouchard Insurance in Clearwater. "Health insurance is one of the most complicated purchases an individual (or) family is going to make."
Bouchard added that the MLR ratios could actually drive insurance rates up in the long-run.
"We don't want the health insurance marketplace to become like the Florida homeowners' marketplace: very few choices and higher premiums."
But for individuals who deal with the frustrations of shopping for health insurance and paying non-discounted rates, no delay in the law would be acceptable.
"Every year, (the premium) is a shock," said Brooke Gast, who pays for her own insurance as owner of "Hype Group" PR and Marketing in St. Petersburg. "I'm a young female, non-smoker, very healthy - I didn't expect to be paying as much as I am.
"The personal accessibility is always good," she said of her health insurance agent, "but I'd rather see a rebate."
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