Expectations High For Insurers

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St. Petersburg Times

Florida has one of the longest lists in the nation of health benefits that must be covered.

Lt. Gov. Frank Brogan knows firsthand the difficulties of getting insurance companies to cover certain cancer treatments. Months before his wife died of the disease, his emotional testimony helped persuade legislators to force insurers to cover the expenses of bone marrow donors.

“I can’t think of a greater gift than to give someone pure life,” Brogan told lawmakers last year.

Prompted by personal experience, constituent complaints and pressure by powerful medical interest groups, the Florida Legislature has forced insurers to cover more health care benefits than any other state except Maryland. Insurers are required to cover everything from mammograms to acupuncture and massage.

For proponents, mandated health benefits protect consumers from a managed health care system in which insurers boost their bottom line by refusing to cover reasonable treatments.

“They just want to make more profits for their shareholders and pay exorbitant salaries to CEOs,” said Sylvia Torgan, the founder of a state group called Advocates for Patients of Managed Care.

But critics say the mandates are contributing to Florida’s rising health costs, which in turn contribute to the state’s growing ranks of the uninsured.

“They are completely political – there’s never any analysis,” said Jodi Chase, a lobbyist for Associated Industries of Florida, which represents business and insurance interests. “It’s the treatment or disease of the day.”

Prompted by a new study by the House Insurance Committee, lawmakers may soon wade into the debate – even as they consider forcing insurers to cover a host of new benefits ranging from eye exams for kids to infertility treatments.

“Last year, I did more to try to stop these mandated benefits than anyone,” Republican House Speaker John Thrasher said recently. “If we keep continuing to pass these mandates, we’re going to run insurance companies out of this state.”

At least 11 other states have passed legislation to require that an outside body or state agency review proposed new health care coverage mandates. State Rep. Stan Bainter, the Republican chairman of the House Insurance Committee, said it’s time for Florida to get a handle on the issue.

But in an election year in which health care promises to be a major issue, the debate in Florida is unlikely to be conducted along strict party lines. Though Republicans control both the Legislature and the governor’s office, lawmakers such as state Rep. Mike Fasano, R-New Port Richey, see coverage requirements as a form of constituent service.

“This is not a Democratic issue or a Republican issue,” said Fasano, who this year is helping former Miami Dolphins quarterback Dan Marino in his crusade to require insurers to cover autism treatments. “Many of these issues come to our attention because constituents come to us with these terrible stories. It is unfortunate that we have to pass legislation to force insurers to provide services that they should be providing in the first place.”

While it’s true that health care consumers have lobbied lawmakers for various mandates, so too have special interest groups that donate money to campaigns and have a lot to gain. For instance, dermatologists pushed the Legislature to give HMO enrollees direct access to their services without first seeing a primary care doctor. The profession made out well: The House Insurance Committee study found that dermatological visits for one HMO increased from 50,000 in 1995, the year before the change, to 90,000 in 1999. But HMOs argue that a primary care doctor can treat many ailments – such as acne – as well as a specialist and at a lower cost.

Anticipating such debates, the Legislature in 1987 required proponents of new mandates to calculate their costs. At the time, Florida had 16 mandated health benefits.

In the ensuing years, the Legislature passed an additional 35 coverage mandates, according to the new study. In all but four cases, lawmakers ignored their own cost-impact requirement. As a result, the study found that it is impossible to know what, if any, impact Florida’s extensive set of health coverage requirements has had on insurance premiums.

In addition, the laws often are not uniformly applied: If you have traditional insurance, for instance, a trip to the chiropractor is covered. That is not the case if you belong to an HMO. The study found that the laws sometimes are so poorly written, it is difficult to tell which type of insurers are subject to which mandates.

One thing is clear: In Florida and across the country, insurance premiums are on the rise. A survey of rate increases approved by the Florida Department of Insurance for the state’s five largest HMOs and traditional insurers drives home the point: For large group HMO plans, the average rate increase in 1999 was 8.6 percent, up from 6.2 percent in 1998. For traditional insurers, the average increase for 1999 was 3.6 percent, up from 1.3 percent in 1998.

Meanwhile, 2.5-million Floridians went without health insurance in 1998. The study found that the number of non-elderly Floridians without health insurance has grown steadily since 1989, exceeding the national average by 30 percent in 1997. This, at a time when unemployment rates dropped.

Bill Herrle, state director for the National Federation of Independent Businesses, believes that mandated benefits are at least partly to blame.

“It’s absolutely a cost factor,” he said. “You pile on all these mandates and it sounds like great public policy, but no one can afford insurance.”

But there are many other factors pushing premium costs upward, including the escalating price of prescription drugs, a shifting balance of power that allows doctors to demand higher fees from HMOs, and medical advances that make less expensive treatments obsolete.

Jamie Court is the author of Making a Killing: HMOs and the Threat to Your Health. He said insurance companies use mandates as an excuse to raise rates, when in fact the rate increases are due to mismanagement.

“It has to do with companies passing on costs that are wholly unrelated to health care costs,” he said.

Officials at the Department of Insurance support many of the study’s recommendations, which include creating a more extensive review process for required benefits and repealing some mandates. But they, too, are skeptical of directly linking mandated benefits with rising health care costs.

“I don’t remember anyone filing for a rate increase that came in solely because the Legislature required them to do something,” said Deputy Insurance Commissioner Susanne Murphy.

Consumer Watchdog
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