Affordable Care Act Not the Only Reason for Higher Premiums

The recent announcement by Florida Healthy Kids that full-pay program participants will experience a rate increase double or triple their current premiums was a devastating blow to many families across the state. According to Florida Healthy Kids, this increase will affect more than 30,000 Floridians and their children.

While health care inflation has contributed significantly to these dramatic rate hikes, the premium increases for full-pay families enrolled in Florida Healthy Kids have outpaced private sector premiums by 750 percent over the past 23 years. As the founding director of the program and its former executive leader for nearly two decades, I see many factors that contributed to this, and the Affordable Care Act is only one part. Luckily, there are options for these families.

In the beginning, the lure of federal funds available through the Omnibus Budget Reconciliation Act of 1989 proved to be tempting to the newly-formed Florida Healthy Kids Corporation, which planned to offer coverage to children in a one-county pilot utilizing the public school system to form an insurable group. The funds made insurance subsidies possible; however, to access the funds, changes had to be made that would push premiums upward. By 1994, the Children’s Health Insurance Program (CHIP) was created by Congress, and in order to qualify for funding, Florida Healthy Kids had to implement a multitude of changes. The combined result was higher premiums and administrative costs with full-pay families feeling the most impact. Still, the trade-offs allowed for statewide expansion.

Fast forward nearly 15 years later when the Children’s Health Insurance Program Reauthorization Act was passed by Congress. Once again, benefits were pushed upon Florida’s program, delivery systems were altered, and a mandated payment system for federally qualified health centers contributed to the increase.

Most recently, the Patient Protection and Affordable Care Act was passed into law. Consequentially, premiums rose again. In my opinion, what’s ironic is that family satisfaction with Healthy Kids benefits and co-payments has not measurably changed since inception of the program, even though Congress continued to tinker with benefits and cost sharing over an extended period while adding to the administrative burden.

Today, the full-pay premium through Florida Healthy Kids is $300 per month, which is higher than what the private sector offers. The federal exchange can offer subsidies to some, but not all, of the affected families.

Where does this leave the rest of Florida Healthy Kids full-pay families?

I hear from Floridians every day who are daunted by the task of selecting health insurance. To be sure, it can be complicated. And nothing makes a person more anxious than trying to select the best health insurance for their family. When public programs are no longer helpful, it’s time to turn to the private sector because we are here to help.

This entry ran in the Tampa Tribune on Tuesday, September 22 and can be found here.

About Florida Health Choices
Florida’s Health Insurance Marketplace and Florida Health Choices, Inc. were established by the Florida Legislature to provide improved access to affordable, quality health care for residents statewide. For more information or to shop for coverage, visit www.MyFloridaChoices.org.