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Massachusetts Lite

Florida's new health-coverage law is health reform on the cheap, and that's not said to denigrate it.


Name

Penelope Lemov

Penelope Lemov is a GOVERNING correspondent. She was GOVERNING's health columnist and was senior editor for several award-winning features.

Charlie Crist calls it a crown jewel. He may be right that in this time of plummeting tax receipts and overstrained budgets, the Florida health care law that the governor pushed through the state legislature in May is a shining gem -- an example of the possible and affordable.

Nothing wrong with that. Nor with the governor and the legislature touting their work as a model for other states. After all, Florida and Crist have done what California and Governor Arnold Schwarzenegger have yet to do -- pass a bill that could make a sizeable dent in the number of uninsured. In Florida, that's 3.8 million people and, strikingly, about 43 percent of those ages 18 to 34.

But is it another Massachusetts: a breakthrough model that will resonate for other states and for federal policy makers as well? Like Massachusetts' law, the Florida model enjoyed bipartisan support and included ideas that sat well with conservative Republicans as well as concepts that made liberal Democrats feel they were doing the right thing. All totaled, it has some good, some bad and some parts that could get ugly.

Stripped down to its basics, Florida's health insurance coverage law addresses the access issue by asking insurance companies to do the heavy lifting. It tells them to come up with ultra-affordable insurance packages that individuals and employees of small businesses can buy. By affordable, Crist is looking for monthly premiums as low as $150, and those packages have to include coverage for things such as preventive services and prescription drugs.

While the state isn't putting up any money, it is offering insurers another form of assistance. It eases the 52 mandated health services that insurers were previously required to cover under law. The newly expendable items range from bone marrow transplants and acupuncture to some maternity services and podiatry. Crist figures those changes are worth a 60 percent cut in insurance premiums.

The law also calls for setting up an insurance exchange -- much like Massachusetts'"connector" -- that would negotiate rates, evaluate plans and act as a go-between for consumers as they debate what coverage to buy. It would handle premiums and claims for companies with fewer than 50 workers. Setting up the exchange will cost taxpayers $1.5 million. But that's it. The exchange has to support itself from a percentage of the insurance premiums it collects.

While Crist admits the new plans will not offer "Cadillac coverage," he points out that "something's better than nothing." Among the better-than-nothings are provisions that allow parents to cover adult children as old as 30 under their plans and to let employees take their individual insurance from job to job.

There also are some dangers, and not all of the hand-wringing is coming from bleeding-heart advocates. Despite the loosening of the mandate strings, insurance companies are far from sure that they'll be able to come up with a $150-per-month policy that's marketable.

It's a real and very legitimate concern. Bare-bones policies have not sold well in the past. Several years ago, when I was reporting on insurance plans that states were hoping would appeal to small-business owners and their employees -- catastrophic insurance with a few bells but not many whistles -- I learned an important lesson. What made sense to policy makers who owned a home, a car and a bank account didn't necessarily mean much to those at the lower end of the income scale. And I understood that on a personal level. When my children were post-college and pre-career, they wouldn't have had health insurance if I hadn't bought it for them. I chose a bare-bones plan for a simple reason: I could easily help them pay the bills for any small health problems. Meanwhile, the catastrophic policy protected me from having to sell all my assets were they to have a devastating medical emergency. That calculus doesn't apply to those who may not have many assets to protect and need a plan that covers the everyday ills -- the hacking cough or dislocated shoulder.

In other words, Florida's law will work only if insurers can offer buyers something useful. Some companies are suggesting that they might limit the number of days of hospitalization or cap reimbursement on certain services -- which is OK, unless the insured person suffers a medical calamity.

Florida may end up being a model for some states or even the feds. It takes the Massachusetts idea that has traction -- the insurance exchange -- and runs with it in a less costly direction. But the question is, will it work?


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