Florida Residents May See 40% Increase in Insurance Premiums

According to rates recently released by the Florida Insurance Department, residents in the panhandle state can expect to see their health insurance premiums increase by as much as 40 percent after Obamacare goes into effect on January 1, 2014.  Florida residents can begin enrolling in qualified insurance plans on the Florida health insurance marketplace starting Oct 1, 2013. The rates for small business group market is also expected to go up by 15 to 20 percent in Florida insurance exchange offered plans. 11 companies will be offering health plans in the Florida’s federally run health exchange.

There are many reasons for this rate hike, including the mandate requiring insurers to cover everyone who applies, the mandate that requires specific benefits be covered, the mandate that forces insurers to charge the same for men and women and the limits placed on insurers in regard to how much they can charge for older people.

The rates from Florida insurance exchange are shown in table below:

Florida Insurance Exchange Rates

Federal Officials Insist Premiums Will Be Affordable

Federal supporters of the Affordable Care Act (ACA), including officials from the Department of Health and Human Services, believe that the rates will not be as high as the state predicts, citing a study of 11 states where insurance plans have already been approved by the federal government. In those states, rates were nearly 20 percent lower than what the Congressional Budget Office had initially predicted.

In addition, the projection that Florida residents will see an increase as high as 40 percent in premiums are based on adding the minimum essential benefits which all health plans sold on federal exchanges must have, to the existing plans available today. This “hypothetical” health insurance plan is not being sold anywhere today. The Office of Insurance Regulation based its rate calculations on premiums currently charged by Florida insurers that offer the minimum rates required by the ACA. As such, the rate increases may not be in line with projections.

The insurance plans expected to be offered on the Florida health insurance marketplace must still be approved by the federal government, but no matter what the rates are, HHS cannot change them. They can only make sure the plans comply with the standards outlined in the ACA and that the premiums are reasonable.

In several other states, proposed premium rates were lowered by their departments of Insurance, but Florida does not have this option. Earlier this year, Florida lawmakers passed legislation senate bill 1842, disallowing the Office of Insurance Regulation from negotiating rates with insurance companies. This law is in effect until 2016.

Federally-Run Exchanges Rates Higher Than State-Run Exchanges

In a national trend, states that have chosen to develop their own health insurance exchanges are seeing lower rates than states that elected to have the federal government develop the marketplaces. The Florida insurance exchange will be a federally run exchange regulated by the federal government, which may account for higher rates overall.

HHS is expected to release rates and more specific details of each plan that will be sold on the Florida insurance exchange by September 1. Residents will be able to enroll in plans through the exchange beginning on October 1 for an effective date of January 1, 2014. All plans offered through the Florida insurance exchange will be offering certain minimum essential health benefits as mandated by health care reform.

Florida Insurance Exchange Rates Does Not Include ObamaCare Subsidies

It is important to note that the rates released by the Florida Department of Insurance do not include federal subsidies that will be available to many people who are currently uninsured to help them purchase insurance through the Florida insurance exchange.

Currently, there are 3,509,167 uninsured residents in Florida. 92 percent of that number or 3,232,485 people are expected to be eligible for either Medicaid or for federal tax credits to buy private insurance through the marketplace. But Florida has elected not to expand Medicaid under the Affordable Care Act, which means a certain percentage of uninsured residents will not be eligible for either Medicaid or tax subsidies.

ObamaCare and its related information is available here. You can also see what you need and how to apply for it here. ObamaCare small employer related topics are covered in this section.

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