Florida to launch its own health insurance marketplace

ORLANDO — Florida, which is fighting to overturn the federal health overhaul, is preparing to launch an insurance marketplace early next year that looks like a distant cousin of the ones being created under the federal law.

Florida’s version aims to give small businesses — those with 50 or fewer employees — an online tool where they can easily shop for health plans offered in their county. The idea, backers say, is to entice employers who otherwise wouldn’t offer coverage.

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Florida will be the third state — and by far the largest — with an insurance exchange, following Massachusetts and Utah. The Florida program is a public-private partnership.

But there are key differences between Florida’s exchange and the type that will be available in 2014 in all states through the federal law:

• Florida’s exchange is open only to small employers, not individuals.

• The federal law provides subsidies to help lower-income individuals buy coverage through the exchange, and tax credits to some small businesses that cover their workers. Florida does not.

• The federal law requires health plans to offer certain “essential health benefits.” Florida does not.

Participation in Florida’s exchange is voluntary for both insurers and small businesses. It is drawing only tepid support from health plans and insurance agents, because both would pay a price for participating. Health plans would pay the exchange 2 percent of the premium for every policy sold through the program, and agents would pay $300 a year to sell policies through the exchange.

Ken Stevenson, a Tallahassee insurance agent, says these extra costs, which would likely be passed on to employers, could end up making health coverage in Florida’s exchange more expensive than policies sold outside it.

“It defeats the whole purpose of having this,” he said.

Michael Garner, chief executive of the Florida Association of Health Plans, said the insurance industry supports the concept of the exchange, although key details have to be worked out. “There’s no silver bullet, but anything that offers more alternatives to employers can make it more likely they will take up coverage,” he said.

Still, a top official with a large Florida insurer said the industry remains unconvinced that selling coverage through the exchange would offer any advantages over selling outside. He spoke on the condition of anonymity because his company is part of an exchange advisory group.

For the past three years, the Sunshine State has had the third highest uninsured rate in the country, after Texas and New Mexico, according to census data. More than 21 percent of Florida residents under 65 are uninsured, or about 3.8 million people.

Premiums for a family health plan in Florida offered by employers with fewer than 50 workers increased 21 percent from 2003 to 2009, according to a report by the Commonwealth Fund. That is below the 29 percent national average. But Florida is one of 16 states and the District of Columbia where the average annual premium for family coverage equaled 19.9 percent or more of median household income, the fund stated.