TALLAHASSEE, Fla. (AP) — Florida’s long-running feud with the federal government over the health care overhaul took another twist Thursday as federal officials turned down a request to waive a key requirement.
The state’s insurance commissioner wanted to delay a requirement that insurers spend at least 80 percent of premiums they collect on care for patients instead of administrative costs or profits.
Insurance Commissioner Kevin McCarty contended the mandate could destabilize the state’s private health insurance market, which covers an estimated 840,000 people and is dominated by a handful of companies. Florida had the nation’s third highest rate of residents without health insurance during the past three years, according to U.S. Census data released in September.
But federal officials did not agree.
Steve Larsen, director of the Center for Consumer Information and Insurance Oversight at the U.S. Department of Health and Human Services, said that Florida’shealth insurance market remains competitive and that the state did not provide enough evidence to back up its request.
The decision means that some consumers could receive rebates if it’s shown that insurers spent too much on overhead and profits.
“We think this is a very good decision,” Larsen said. “It’s going to continue to ensure (consumers) will get value for their premium dollars.”
The decision by the administration of President Barack Obama comes a few months before an expected showdown over the federal health care overhaul.
Florida’s Republican-controlled state government has led the legal fight to declare the overhaul unconstitutional. The case will go before the U.S. Supreme Court next year and a decision will be rendered next summer right as the presidential election heats up.
Florida has also rejected various federal grants associated with the overhaul.
McCarty’s office issued a brief statement saying that it was disappointed with the decision and pointed out the state held two public hearings where it took testimony about the potential impact of the requirement, which is also called a “medical loss ratio.”
In a lengthy letter to McCarty, federal officials noted most of the testimony came from insurers opposed to the requirement. The analysis by the federal government also concluded that many insurers were already meeting the 80 percent requirement or were profitable enough to afford customer rebates.
Larsen also said that his department had received an “unprecedented” amount of comments from people who opposed granting Florida’swaiver request.
Gov. Rick Scott, who has been a fierce critic of the federal health care overhaul, said on Thursday that he was unaware of the federal government’s decision. Scott had been out of the country on a trade mission to Israel.
Several organizations who support the federal care overhaul praised the decision to reject the state’s waiver request.
“The message sent today by the administration is clear: insurance companies will be held accountable and there’s no way around it,” said Laura Goodhue, executive director of FloridaCHAIN, a health care advocacy group.
She added that the decision shows that consumer protections in the overhaul “can’t be stripped away, regardless of maneuvers by insurers to boost profits or by state leaders to push a political agenda.”
Copyright 2011 The Associated Press.