Checking the Pulse of Healthcare in SW Florida Part II

consumer, says ‘No, we’ll give you 2 percent,’” says Elliott. As a result,

“insurance companies have continued to leave the state of Florida over the last

five years at pretty record-setting paces.”

That’s

what has happened with American Medical Security. AMS continues to offer

individual insurance in Florida. But it is withdrawing its small group

insurance coverage “because of a history of an inability to get rate relief —

permission by the state to get price increases on a product,” says company

spokesman Cliff Bowers. “This in the face of rapidly escalating health care

costs, particularly driven last year by pharmaceutical costs,” he adds.

Different

states have varying degrees of regulatory control, but “Florida is one of the

most difficult ones. In many states, they allow the economy, the free market

system, to more properly control rates,” he said. “Believe me, Florida was a

very important state for us. We would have preferred to have stayed viable.”

Last

year, the Florida legislature eased the regulations a bit for insurers.

“Carriers

have argued that there has been a lot of abuse in one-life groups, which causes

overall small group rates to increase,” Robleto says. New legislation limits

the time period one-person groups can enroll and what a carrier has to offer

them.

New

regulations also allow carriers to consider a person’s claims history. Before,

age, gender, and the group’s geographic location determined rates. Now, Robleto

says, “they can consider the claims experience of that group, they can consider

the health status of the members of that group, and they can increase (or

lower) the rates as much as 15 percent over the average rate.”

Competition

Dwindles

As

insurance carriers have left the state, competition has declined, particularly

in smaller markets such as Lee and Collier counties.

Robleto

says he still sees plenty of competition in the small group market; the number

of carriers has decreased because of mergers and because of efforts to weed out

carriers that were licensed but not active in the state. If it has declined, it

might be because carriers don’t make it financially viable for agents to sell

those products, he adds.

But in

Southwest Florida, the number has indisputably dwindled, many say.

“That

would be an understatement. ‘Evaporating’ is probably the word you’re searching

for,” says Charles Ingram with a laugh. Ingram is director of sales and

marketing for Smart Payroll Solutions, a professional employer organization

that handles such administrative matters as payroll and benefits packages for

small businesses.

“There

used to be seven, eight, maybe even 15 carriers. I’ve watched that hit the

skids to where we have two or three adequate players in the marketplace,” he

says.

“Going

back about seven years ago, if you were an employer with more than 10

employees, I could probably get you a dozen proposals,” says Jane Stephens, an

agent in the employee benefits division at Oswald Trippe & Company, Inc.

“Today, for that size, I could get you three.”

Collier

County

In

Collier County, competition has been even more scant than in Lee County.

Larger,

metropolitan areas with numerous hospitals are more likely to have more

insurance carriers because they have more providers to contract with, says Bob

Whitlock. Insurance companies can promise to bring a hospital more patients in

exchange for discounted rates, but in Collier County, patients go to the only

health care system that has been available, so carriers have less bargaining

power.

Blue

Cross/Blue Shield’s HMO has been popular in Lee County, the Whitlocks say, but

they can’t sell it in Collier because there is no provider network in Collier

for that product.

NCH

contracts with Florida 1st Health Plan’s HMO, says Willems, of Community Health

Partners. It has not contracted with one of the larger HMOs, she says, because

“there hasn’t been an interest from our employers in an HMO. ... In order for

HMOs to be successful, you need to have a certain number of members enrolling

in them, and that means that the large employers would have to embrace the

HMOs. That just hasn’t happened here.”

Limited

insurance products available in Collier County means access to health care can

be difficult if NCH doesn’t carry your plan — a situation employees at Suncoast

Rehabilitation and Aquatics are in, says group director Angela Valvo Collins.

Former owner of the company, she recently sold it to Physiotherapy Associates,

a national company with an Aetna PPO plan. That plan doesn’t have a network in

Collier County, and she hopes that the opening of the new Cleveland Clinic

Florida hospital will change that.

“In

Collier County, plans are very limited and managed care has not penetrated,”

says Jackie Weder, director of marketing with Cleveland Clinic Florida.

Hospital officials are in the midst of negotiations. “I know they are looking

into all of the avenues because they do want to (reach) as many people as possible

within that market.”

As a

health care provider, Valvo Collins knows both sides of the insurance-provider

story.

“The

reimbursement for this particular plan is so poor to physicians and hospitals

that nobody wants to enter an agreement, so we have to go to Lee County to

access our care.” That means taking a few hours off of work and, in case of a

sick child, those appointments cannot always be planned.

Employers

Look for Alternatives

Insurance

rates have probably doubled within the past five years, say the Whitlocks, of

Southwest Florida Insurance Associates.

“It’s

not at all unusual to see 30 to 40 percent, depending on the makeup of the

group,” Ingram says. “You can’t be crushed by seeing a 10 to 20 percent

increase, because that means you’re on the lower end.”

If it

goes much higher, it likely has to do with the group’s members.

“There

are a number of things that affect rates that even get way beyond us,” says

Robleto of the Department of Insurance. “We could approve an overall 15 percent

increase in rates,” but what happens at the group level can add onto that

increase — maybe turnover in the group brought in older members, or more women,

or perhaps members have had more claims.

“Our

fear is that (financially) marginal employers are no longer going to be able to

afford health insurance,” Bob Whitlock says. “It may be that one of the first

things they do is get rid of their employee benefits, and there we go with more

uninsured people.”

For the

most part, employers won’t drop their insurance benefits in such a tight labor

market unless they’re facing lay-offs anyway, Ingram says. “If you get rid of a

major medical plan, what you’re at risk of doing is chasing out the quality

people you need in order to do the profit-making part of your business.”

Jill

Tyrer is a Cape Coral-based freelance writer and editor.