By Tom Brown
MIAMI (Reuters) - Florida's leading health insurer is reaching out to hundreds of thousands of state residents, touting temporary relief from what it describes as an imminent spike in premium rates due to President Barack Obama's signature healthcare reform law.
"When the new healthcare law takes effect, you may be surprised how much more you could pay for health insurance," says an advisory to consumers from Blue Cross and Blue Shield of Florida, also known as Florida Blue.
"Find out how much you'll save if you buy now," adds the advisory, which has been mailed over the past month to homes of existing policyholders and potential new clients.
"Let us help you get the best deal on health insurance right now," the notice says. "We can even tell you if you can get help paying for coverage from the government."
Under Obama's Patient Protection and Affordable Care Act, millions of uninsured Americans will be able to buy government-subsidized health coverage on new online state insurance exchanges beginning on October 1. The cost of the new plans, which require insurers to provide more benefits to consumers and bar the exclusion of people with prior illnesses, is a key factor to making the enrollment effort a success.
However, the law also allows consumers to select from existing individual insurance policies now and extend them into 2014. While these existing policies may be cheaper in some states than those under the Obamacare reform plan, many may not contain the same comprehensive benefits.
Florida Blue's notice marks one of the more aggressive efforts by an insurer to tap into fears of "sticker shock" for the newer Obamacare plans. Republican-led Florida refused to set up its own insurance exchange, leaving the job to the federal government.
The enrollment stakes are big in the Sunshine State, where the U.S. Census Bureau says there are about 3.8 million people without health insurance. About a quarter of Florida's population is uninsured, giving it the third-highest rate in the country.
Florida's insurance regulators have said the cost of new insurance plans may rise 30 to 40 percent when compared with a fictional 2013 plan modeled to include the same benefits. But rates in the state are still being finalized between insurers and the U.S. Department of Health and Human Services. The Florida estimates don't include substantial subsidies that a majority of uninsured people may qualify for.
Florida Blue said the advisory is part of a direct mail advertising campaign aimed at drumming up new business for the Jacksonville, Florida-based giant, which reported $8.9 billion in revenues last year and covers more than 4.3 million people in its primary health business in the state.
The company, a leading contributor to the political action committee of Florida's Republican Governor Rick Scott, is one of nine insurers that have applied to sell non-group policies on the state's new marketplace and the only one that promises to cover every county in Florida.
Craig Thomas, the executive responsible for marketing and strategy at Florida Blue, said the consumer advisory - unlike anything seen from other health insurance companies in Florida - was part of what he termed "an appropriate marketing program."
It primarily targets many people purchasing coverage in Florida's individual market today who will be ineligible for premium subsidies under Obamacare, Thomas said.
Many of those same consumers will be hit with higher rates because of benefit changes and other factors tied to next year's full implementation of the law, he said.
"Their rates are generally going to go up," said Thomas. "New expenses are going to be reflected in next year's premiums."
Federal and consumer groups dispute the state's projections. Health and Human Services Secretary Kathleen Sebelius told reporters on a recent Florida visit that competition for customers should help keep premiums in check.
An HHS spokeswoman declined to comment on the Florida Blue campaign, which comes against the backdrop of a full-court press by Scott and other Republican leaders in the state to undermine Obamacare.
But Ron Pollack, who heads Families USA, the national healthcare consumer advocacy group, strongly criticized the campaign and said it could hurt enrollment in Florida for coverage under the president's reform plan.
"This letter from an insurer that has tried to appear helpful to consumers is outrageous, misleading and for many, totally erroneous," Pollack told Reuters.
"People who get suckered into this appeal may very well lose many thousands of dollars in premium subsidies that become available soon if they enroll starting on October 1 in health coverage through the Affordable Care Act," he said.
Republican opponents of the reform law were the driving force behind Florida Senate Bill 1842. Signed into law by Governor Scott in May, the legislation prohibits Florida's Office of Insurance Regulation from providing any real protection for consumers from unreasonably high health insurance rates.
The federal government says it lacks the legal authority to regulate insurance premiums in individual states, though it is trying to persuade insurers to alter higher-priced plans when it can.
Sebelius, who has said she was "baffled" by Florida's move, commented earlier this month that she knew of no other state that had chosen to eliminate its own regulatory oversight, leaving consumers at the mercy of health insurance companies.
"It's really unconscionable that the Florida legislature and Governor Scott would take what is in essence the insurance cop, regulating insurance companies, off the playing field, take that cop off the beat ... It just doesn't make sense for families or small businesses. They're supposed to be on our side," said Tampa's U.S. Representative Kathy Castor.
Castor, Debbie Wasserman Schultz and seven other Florida Democrats in the U.S. House of Representatives sent a letter to Sebelius decrying their state's deregulation of health insurers as "a cynical and intentional effort by Governor Scott and the Florida legislature to undermine the Affordable Care Act and make health insurance premiums more expensive on the Florida Health Insurance Marketplace."
The same law that curtails Florida's rate-setting authority requires insurers to issue notices to consumers, blaming hikes in premiums on "the impact of federal healthcare reform."
A copy of one such notice, which all health insurance companies operating in the state will be required to use, was made available to Reuters by the insurance commissioner's office.
Thomas, who spoke in a telephone interview with Reuters from Jacksonville, said many Florida consumers could benefit financially from buying policies now, even though the plans would expire under Obamacare with no chance of renewal.
"The benefits and rates they buy now would not be changed until the product anniversary date gets here next summer," Thomas said. It will carry them with their current program well into next year," he added.
He and other company officials declined to comment on how Florida Blue's premiums in 2014 would compare to existing rates.
(Editing by Ken Wills)