In this December 2014 photograph, Florida consumers wait outside an insurance brokerage at the Mall of the Americas, where they applied for an Affordable Care Act plan through the federal insurance exchange at healthcare.gov. Federal officials on Thursday announced that 8.8 million consumers selected a plan for 2018 on healthcare.gov during the open enrollment period that began on Nov. 1 and ended Dec. 15 — despite having fewer days to sign up. Florida led the 39 states using healthcare.gov, with 1.7 million consumers selecting a plan for 2018.
After two consecutive years of significant rate hikes, average monthly premiums for health insurance plans purchased on the Obamacare exchange will hold steady in Florida next year, signaling stabilization in the marketplace.
Premiums for Floridians on health plans purchased through the Affordable Care Act, also known as Obamacare, soared in 2018 and notched up a tick further in 2019, but a report released Friday by the Florida Office of Insurance Regulation showed no rate change on average statewide for 2020.
Steve Ullmann, a healthcare policy expert at the University of Miami, said that the rate hikes from prior years were in response to concerns about whether federal subsidies would continue and the change in law that effectively eliminated the individual mandate that required most citizens have health insurance or pay a fine. But the worst-case scenarios of those fears have not yet materialized, and subsidies have continued.
“The market was more stable than anticipated,” Ullmann said.
The newfound stability has lured more competition to the marketplace.
One new player in South Florida is Oscar Health, a technology-focused health insurance startup founded in 2012 that will operate next year in Miami-Dade, Broward and Palm Beach counties. The company is expanding its footprint in the state after a successful test run in the Orlando market this year, and will also enter the Tampa, Daytona Beach and Ocala markets.
Will Johnson, the southeast market director for Oscar Health, said premium stabilization is encouraging new competitors to enter the Florida marketplace because it offers health insurance carriers a clearer picture of what the landscape looks like.
“It’s a confluence of reasons but with any kind of expansion efforts, it’s risk versus relative reward,” Johnson said. “With premium stabilization, you’re just a little bit more certain where some of the other carriers are going to come out.”
Ullmann, the UM healthcare policy expert, said that in addition to the stabilization of the marketplace, insurance companies are also getting more competitive as more carriers are moving toward narrow networks, limiting hospital and physician choice to gain more leverage when negotiating rates with healthcare providers.
“People have become much more price sensitive and insurance companies are aware of that,” Ullmann said. “What we’re seeing now with our insurance programs is limited choice, but, as a result, lower cost associated with that insurance policy, and that’s how they are competing with each other and maintaining their margins.”
Ullmann said that the stability in the marketplace might not be around for long, given the looming presidential election in 2020 and an unresolved federal lawsuit, Texas v. Azar, that could strike down the ACA. The Republican Party nominee could still run on a “repeal and replace” platform.
“The other way is ‘Medicare for all,’ which is also a repeal and replace, or it could be an adjustment to what exists currently,” Ullmann said. “It’s all right now very much up in the air.”