October 15, 2003

This week two panels created to bring more Floridians under the shelter provided by health insurance held meetings at opposite ends of the state.

On Monday in Tallahassee, Florida Chief Financial Officer Tom Gallagher convened the second meeting of the Governor's Task Force on Access to Affordable Health Insurance. His co-chair, Lt. Governor Toni Jennings was out of the state and did not participate.

The meeting was devoted to an investigation of the first three of the task force’s six goals, which are as follows:

• Identify the contributing factors to the increasing costs of health insurance and the cost of accessing insurance in Florida.
  
  
• Identify the major barriers that prevent Floridians from obtaining health insurance coverage.
  
  
• Identify federal issues regarding health insurance coverage that may contribute to higher health insurance costs, and which may need to be communicated to federal lawmakers.
  
  
• Investigate pilot and other alternative approaches to traditional health insurance which have been demonstrated to be effective in providing health care coverage to various populations.
  
  
• Identify potential partnerships the state can utilize to increase available health insurance coverage.
  
  
• Provide policy recommendations to improve access to affordable health insurance, and achieve more predictable cost, while maintaining consumer choice.

As the list indicates, the meeting was spent helping the task force members understand the root causes of uninsurance.

During the presentations, panel members gained insight, often in depressing detail, about the regulatory and market factors that diminish access to health insurance.

Task force co-chair and Chief Financial Officer Tom Gallagher said that the uninsured problem impacts everyone, and burdens insured Floridians with an additional $262 annually in increased taxes and insurance premiums to cover the costs of providing care for those who don't have private insurance.

Vernon Smith, a principal with Health Management Associates, a Michigan-based research group that is advising the task force, presented research data on the factors contributing to the growth in health-care costs. Smith was careful to note that there is not one factor that can be blamed for the leap in health care inflation; rather he attributed the double-digit increases to “a constellation of factors.”

The data covered by Smith revealed the following:

• Growth in per capita private health spending measured 8.1 percent from 2000 to 2001.
• Inpatient and outpatient hospital care account for 51 percent of growth in the cost of per capita private health spending in 2002.
• Growth in prescription drug spending is on the decline, from a high of 18.4 percent in 1999 to 13.2 percent in 2002; this sector accounts for 22 percent of the growth.
• In 1988, 73 percent of the insured received their coverage through a traditional indemnity contract, 11 percent through preferred provider organizations, 16 percent through HMOs, and none through point of service; in 2002, those ratios were markedly different: (respectively) 5 percent, 52 percent, 18 percent, and 26 percent.
• Health insurance premiums grew 13.9 percent in 2003; the growth rate was 12.9 percent in 2002, and 10.9 percent in 2001.
• The growth in the cost of health insurance is now outstripping the growth in the cost of health care; from 1995 to 2000, however, the cost of care grew faster than the cost of insurance.

Smith displayed a chart that showed five significant spikes in the amount of private health spending per capita in the almost 40 years since the establishment of Medicare and Medicaid. The current growth spurt comes 12 or 13 years after the last peak, and six or seven years since we were in a lower-than-inflation growth period.

Stephanie Lewis of the Georgetown University Health Policy Institute also made a presentation on the first goal. Hampered by mechanical difficulties during her presentation, Lewis offered little in the way of illumination but seemed to suggest that Florida needed more stringent public spending and stronger regulation of insurance companies to force them to sell more policies at better prices.

Subsequent presentations identified long lists of barriers erected between the uninsured and health care coverage, including such oldies but goodies as cost-shifting, state mandates, and restrictive eligibility requirements. The discussion on the role of the federal government in stifling access to health-care coverage focused on the regulatory stew of acronyms, such as HIPPA, COBRA, EMTALA, ERISA. Other factors were identified, including the the tax code’s unfavorable treatment of the individual health-insurance consumer.

Prior to adjourning, CFO Gallagher advised task force members that their next meeting would fall on Monday, November 17,  in Tampa. At that time they will address the development of alternatives to traditional health insurance and other options for providing coverage to the uninsured. The panel will also hear a history of previous initiatives undertaken in the state.

At its Tuesday meeting in Miami, the House Select Committee on Affordable Health Care for Floridians focused on innovative programs that have helped expand insurance options. Harry Spring with Humana described a flexible benefits plan started by Humana three years ago, which lets consumers choose between nine different "baskets" of services.  He also explained the systems Humana has put into place that allow consumers to make better decisions. Spring expressed Humana’s support for consumer education programs and other products such as medical-savings accounts. These kinds of proposals fall into a broad category of reform called consumerism, which gives consumers more control over their care and more responsibility for the costs. Consumer-driven reforms promise to restrain over utilization and inflationary pressures that are inherent in the third-party payer model that dominates the American health-care system.

Representatives of the Health Council of South Florida discussed measures by Miami-Dade County to expand coverage to certain low-income workers whose health insurance costs would be shared by both the county and the employer. This plan has not received final approval but planners indicate that the program will cover 10,000 workers at start up and will eventually expand to 50,000 workers.

Bob Wychulis from the Florida Association of Health Plans called for greater emphasis on evidence-based medicine, which would help reduce the costs of waste involved in providing unnecessary or ineffective testing or treatment. He also advocated for an expansion of health-flex plans, which give employers greater control over plan design, and a mechanism to provide for review of hospital charges for patients who are not in managed-care plans.

The select committee will hold its next meeting on October 20 in Tallahassee. The meeting will begin at 3:00 in Morris Hall, which is located in the basement of the House Office Building.