In this year’s health exchange, one in three Florida consumers chose Florida Blue, the state’s leading health insurance provider, health insurance attorneys in Fort Lauderdale report. But even with all of these new customers enrolling, Florida Blue executives say that the company may be forced to raise rates to handle the incoming enrollees who are older, sicker, or in need of more extensive and expensive coverage.
Florida Blue CEO Patrick Geraghty said in an interview that the company “will be under tremendous financial pressure initially given the age, risk profile, and high utilization of the new membership. It is far from clear that large enrollment in the marketplace is a financially beneficial place to be.” The Affordable Care Act (ACA) has opened up the health insurance market to everyone this year, and Florida Blue reported an additional 339,000 consumers, or about 34 percent of the nearly 1 million people insured through the nonprofit Blue Cross and Blue Shield affiliate, have enrolled as a result. Many of these new consumers are older and in need of long-term medical care, or have serious medical conditions that require expensive health services.
In 2012, Florida Blue reported earnings of $217 million net income on $9 billion in revenue, in its 24th consecutive profitable year. The company insures nearly 4 million Florida residents in all areas of health insurance, and the increase has only boosted their consumer numbers. Initial reports show that only 23 percent of the newly enrolled consumers fall in the 18 to 34 age range, compared to 28 percent nationwide. Originally, the federal government projected that 40 percent of enrollees under the ACA would be young adults within this range, and the company had not expected such a low percentage, Geraghty said. In Florida, it has been difficult to sign young adults up for insurance, due to the law’s stipulation that the oldest people signing up for coverage must not pay more than three times the rate paid by the youngest people enrolled.
Florida Blue has not yet revealed its proposed insurance rates of 2015, but the company submitted next year’s plan to state regulators in June. Open enrollment for 2015 begins on Nov. 15, 2014, and will end on Feb. 15, 2015. Only two insurers so far have disclosed their 2015 rates: Humana has an expected 14.1 percent increase for its health maintenance organizations (HMOs), and its preferred provider organizations (PPO) have a 2.2 percent average increase. Molina has projected that their rates will decrease by 11.6 percent on average for all plans.
Despite the potential cost increases, Geraghty said that Florida Blue remains committed to providing individual health insurance across the state, as it is currently the only carrier to provide insurance for people in every county in Florida.
At Lubell Rosen, our health insurance attorneys represent insurance providers and companies, doctors, hospitals, and other professionals in the field of medicine who are dealing with the ACA mandated changes that have been and will continue to affect the insurance market. For a free, no-strings consultation, contact an attorney at Lubell Rosen today.