FLORIDA CHAIN’S RESPONSE TO GOVERNOR RICK SCOTT’S JANUARY 6, 2017, LETTER TO THE U.S. HOUSE MAJORITY LEADER
For Immediate Release
January 12, 2017
For the average Florida Health Care consumer who is not intimately familiar with the workings of the US health care delivery system, Governor Rick Scott’s letter late last week to the House Majority Leader sounds full of great ideas. From Florida CHAIN’s perspective, a group very familiar with the inner workings of the system, it is quite a different picture.
Governor Scott is basically suggesting a wholesale repeal of anything connected to Affordable Care Act a/k/a Obamacare. This would be a travesty. Upon repeal, approximately 20 million people would immediately be without health insurance and the cash flow mechanism between hospitals, physicians, pharmacies and all the other players would become a short-term disaster.
The Affordable Care Act is far from perfect, but with some targeted modifications to fix those parts that are problematic, we could come up with something very workable. This solution, however, needs to be developed through an evolving process, not an across the board repeal with piecemeal segments, as the country waits for the various replacement plans to evolve and be revealed in the new Trump Administration and 115th Congress.
Governor Scott is quick to point out that through Obamacare, costs are skyrocketing, and people have not been able to keep their doctors. This may be true in some areas, but it is due to many factors, including the lack of government regulation of insurance rates (as in Florida), skyrocketing costs of drugs and medical care due to some pharmaceutical companies and other providers putting shareholder profits before patients, and golden parachutes for retired CEOs. Insurance companies often charge high deductibles and co-pays and they develop narrow networks where only the most cost-effective physicians are allowed to participate. The Governor’s recommendations neither address nor acknowledge these important issues.
Governor Scott, in line with many of his Republican contemporaries, asks for a repeal of the individual and employer mandates. While there may be a better way to handle these mandates than the current law provides, it is a basic fact of insurance theory that everyone needs to “buy- in” to be able spread the risk. Without mandates, the young healthy people will just opt of the game until they need expensive medical care and premium rates will clearly go up for the people who need the policies. It’s simple math – An insurance company cannot balance its books if it only writes policies for sick patients who file expensive claims. Perhaps mandates could be repackaged as tax credits, or even a very small mandatory across the board tax increase to fund insurance, but there is no way this scenario can play out without young and healthy participants being made a part of the insurance pool.
Regarding Governor Scott’s suggestion of increasing dependence on Health Savings Accounts (HSAs), it is true that HSAs can be very effective. However, for the population at large they are only truly useful if and when consumers buy into them when they are young and healthy so that they can build up a reasonably sized account that can be used for future health expenses, including the expenses associated with chronic or catastrophic illness. HSAs also require the consumer to be well educated in managing their healthcare. Most consumers are not. The health care system is not designed to expect the average consumer to be well-educated in managing their healthcare. Most importantly, HSAs are simply unaffordable to lower income individuals. To use HSAs in a random matter as Scott seems to suggest only creates a whole array of new problems.
Florida Governor Rick Scott’s suggestion to allow insurance companies to sell across state lines is a terrible idea. States have mandates in their insurance laws to protect their consumers from fly-by-night companies and predatory scams. Mandates in Florida alone cover many things from well-baby screenings, mammograms, up to five visits a year to see a dermatologist without a referral, to diabetes equipment and supplies, and many more. These regulations also mandate the solvency of insurance companies and give consumers and providers a way to take action against companies who refuse or fail to pay claims. These are all very consumer friendly, they promote preventive care, and they have been developed in the state legislatures as protections against the frequent egregious actions of bad actors in the insurance industry. If people can buy policies across state lines, consumers may lose these valuable protections when they get sick and need the coverage. Imagine as a Floridian using some low-end policy from Oklahoma and finding out it will not cover a certain problem or the company is insolvent and will not pay claims. In order to take action against that company the Florida consumer would be required to make a complaint to the Oklahoma regulatory authorities who have no interest in Floridians. Logically, if the sick Florida consumer wanted to take legal action against the Oklahoma company, the Floridian would have to go to Oklahoma to sue. Florida consumers would have no recourse within their own state against policies sold in the state. The State of Florida insurance commissioner currently has a great deal of power, but only within our state for policies issued in Florida. Sale of health insurance across state lines would eliminate that power for those policies issued from other states and leave Florida’s consumers wholly unprotected.
Another suggestion that might sound good, but in reality does not hold up, is the concept of expanding the managed care model for Florida Medicaid. Numerous independent studies have documented that the managed care Medicaid model in Florida has been a disaster for patients and physicians, but fantastic for the insurance companies which are prolific election campaign donors. For most enrolled patients it is nearly impossible to get a referral to a specialist, the reimbursements to doctors are embarrassingly low, and the managed care companies repeatedly are making record profits. Recently, the State of Florida had to settle a lawsuit involving its Medicaid Managed Care system because its managed care companies were unreasonably denying services to patients, leaving them without necessary and life-saving care and treatment.
The basic intent of Governor Scott’s letter is good: find a way to deliver better quality health care to more people and at a lower cost. In reality, it provides more smoke and mirrors Florida has seen from this administration, now magnified by the priorities of the Trump Administration and new Congress. Immediate repeal of the Affordable Care Act followed by series of questionable alternatives is not a viable option for consumer or providers. Such actions will lead only to a sicker population with far fewer people insured, more medical bankruptcies, and rationed health care. Florida CHAIN is looking forward to continuing its 17-year history of providing a voice for Florida consumers seeking accessible and affordable health care.
s/ Members of the Board of Directors of Florida CHAIN
Florida CHAIN (Community Health Action Information Network) is a statewide consumer health advocacy organization dedicated to improving the health of all Floridians by promoting access to affordable, quality health care. We fulfill the critical role of building the capacities for and linking consumer, community and service organizations with health care advocacy. We provide policy education, collaborative networking, training, and communications and organizing tools to the public, allied partners, media and policy makers.