An Answer to the Uninsured?

This article started out as a story of hope for uninsureds, and hope for everyone looking to control health-care costs. A state advisory board in December came up with two ideas that, on the surface, could put one of the biggest dents in the uninsured population in years. One recommendation would let all young adults in Florida stay on their parents' health insurance policies until age 25. Today, kids typically are jettisoned from coverage once they complete college or leave home at age 18. A second proposal would require all college students to have coverage as a prerequisite for taking classes. In Florida, only Florida State University has adopted this rule.

While an advisory committee recommendation has a long, long way to go before becoming a Florida law, there has been a glimmer of optimism recently because officials from the Office of Insurance Regulation and the insurance industry are supporting both ideas.

“This would not be an incremental step, it would be a major step in lowering the number of uninsureds,” said Steve Smith, a lobbyist for Blue Cross and Blue Shield of Florida, in regards to the idea of keeping young adults covered until age 25 regardless of whether or not they are still dependents. He estimates the change would add as many as 200,000 to the insurance rolls.

Insurers also said building a market for college students to be covered would be a good step — mostly because it would add a layer of generally healthy people to the insurance pool.

Looking for a New Direction

The Florid Health Insurance Advisory Board, which is chaired by Florida Insurance Commissioner Kevin McCarty and contains representatives from insurers and insurance agencies, made a total of 16 recommendations. They carefully avoided making any suggestions that would incite a political backlash, such as requiring employers to pay into a state fund or provide insurance coverage. Instead, they called for expanding Health Kids, increasing the use of electronic medical records, and updating the 2004 University of Florida study on uninsureds. They also called for continuing a little-used state program called Health Flex, which allows insurers to sell coverage without state-mandated benefits.

But by far the two ideas that generated the most excitement were requiring college students to have insurance and extending insurance coverage to children who no longer are dependents of their parents until they reach the age of 25.

Why is this so important? The most common age to be uninsured in Florida is between the ages of 18 and 24. In this group, about 29 percent of Florida females and 37 percent of Florida males are uninsured — higher than any other age category. In all, one in four Floridian residents under the age of 65 lacked health insurance coverage in 2006, according to an estimate by the U.S. Census Bureau. That means nearly four million Floridians had no health insurance.

Despite these ballooning figures, the issue of not having insurance has yet to resonate among legislative leaders in recent years — possibly because of all the attention to auto and property insurance.

Another Year, Same Song?

However, here's where the hope for major health reforms begins to fade. Lawmakers took a wait-and-see attitude towards the advisory committee's recommendations. Cue the sad music.

“I am enthusiastic about looking at any suggestion anyone has to reduce the cost of health care,” said Sen. Bill Posey, a Rockledge Republican and chairman of the Senate Banking and Insurance Committee.

Similarly, a spokeswoman for Gov. Charlie Crist would not say whether he would endorse any of the recommendations from the advisory board. The state's Agency for Health-Care Administration has put together its own group to study the issue of uninsureds and is looking to make recommendations.

Harry Spring, a lobbyist for Humana and a member of the advisory board, said that adding more people to the same policy will drive up overall costs. “What you are talking about are people over the age of 25 who cannot find employment that offers health insurance,” said Spring. “We have to be straight about it, that it will increase costs.”

State University System Chancellor Mark Rosenberg said the group that oversees Florida public universities has discussed the health insurance mandate, but members worry about dramatically increasing the cost of college. “It could become another unfunded mandate,” said Rosenberg.

With these criticisms, it is easy to see how these good ideas to reduce the number of uninsureds could get lost in the backwater of Tallahassee committee meetings this spring. The comments further show why reducing the number of uninsureds has remained one of the most intractable problems not only in Florida, but also nationwide. Consumers don't want to give up any disposable income, employers don't want to give up their bottom line, and insurers do not want to sacrifice any of their profits. Even colleges are afraid of doing anything that will make themselves less attractive.

Karen Hovis, an insurance agent with Hovis Insurance and Financial in Stuart, said the state needs to not only change the laws, but also change the culture about health insurance. “People need to know it's unacceptable not to have health insurance,” she said. “A lot of young people have decent jobs with benefits, but they would rather spend the money elsewhere than on insurance.”

Many recent high school and college graduates in Florida leave school for jobs that don't provide health benefits, so allowing them to stay under mom and dad's policy would be a major help. Because young adults are healthy, she doesn't think it will have a big effect on costs.

Under the advisory board proposal, children would have to stay continually on their parents' policy. They would not be allowed to jump in and out of coverage when they needed it. “This proposal would help increase the pool of healthy people covered by insurance, which would lower premiums for everyone,” said Hovis.

In effect, the proposal would help in the same way that mandating all individuals to buy insurance would — a proposal being pushed by several Democratic presidential candidates and in Massachusetts.

If the state legislature adopts the board's recommendation on college students, Florida would join Massachusetts, New York, and Idaho in imposing such a requirement. The cost of coverage varies greatly throughout the state, according to the board, with a policy costing nearly $2,400 in Miami. The board said it would set up “hardship waivers” for those students who could not afford the coverage. The measure would impact about 25,000 students statewide.

Managing a Mandate

Hovis likes the idea of a college health insurance mandate, but she thinks it will be a problematic to administer. “It's a good goal to have, but enforcing it will be difficult, ” she said.

FSU officials found that out this year when they tried to implement their new law. They acknowledged that they didn't catch everyone because they allowed students to register for classes without showing proof of insurance — something that won't happen next year. “It's been an accounting nightmare for us,” said Lesley Sacher, director of the Thagard Health Center at FSU, who helped apply the mandate. “We will be doing things differently next year.” She said that next year's students who don't have health insurance will be treated the same way as those who fail to get the required vaccinations — they won't be allowed to register for classes.

FSU does not care where the student gets health insurance, though the university offers a policy through a subsidiary of Aetna that costs about $1,440 a year. This year, it sold about 3,500 such policies, which is triple the amount sold in previous years. To put that number in perspective, the university has about 41,000 students, including nearly 9,000 freshmen who were affected this year by the new insurance mandate.

The University of Florida is considering mandating health insurance for next year and Sacher said that she would welcome other Florida schools joining in. “Anyone who wants to share the wind on this branch would be welcome,” she said. “As mandatory health insurance becomes the norm and not the exception, major insurers will become more interested in selling policies to this market.”

Dan Rosenthal, CEO of UnitedHealthcare of South Florida, said that everyone has a responsibility to make health care affordable. “Anything that expands access for people to have coverage is a good thing.”

Blue Cross' Steve Smith doesn't think allowing young adults to stay on their parents' policy longer will increase premiums. One reason is that many policyholders pay the same premium regardless of how many children they have. Smith notes that Blue Cross and Blue Shield of Florida already sell individual policies that have high deductibles and low premiums that would make sense for college students to buy.

There will always be naysayers to any approach that helps the uninsured. Smith has heard some critics say requiring college students to have insurance coverage while also increasing their tuition will be too difficult on some. But he's optimistic for change. “We need to make sure we add people to the insured ranks and if we can do that, that would be good for everyone.”