Florida Moves Forward With State-Level Exchange

Published December 8, 2011

As states await the fate of the federal health care overhaul in the courts and the next Congress, Florida is moving forward with the implementation of Florida Health Choices, a program the state claims will decrease the complexity of health insurance for small businesses. Yet because the system is an insurance marketplace, or exchange, some legislators are concerned Florida’s program could be compromised by federal efforts to implement health insurance exchanges in each state.

Florida Health Choices was created before the federal health care law was passed and is currently expected to launch in early 2012. Funded by state seed money, the insurance exchange will not comply with the requirements for state exchanges within Obama’s law, nor will it channel federal tax credits or use federal funding for implementation.

John Graham of the Pacific Research Institute says Utah’s existing insurance exchange, for example, would not be approved by the federal government as meeting the requirements for exchanges, so it’s safe to assume Florida Health Choices would be denied as well.

That would be unfortunate, he says. “I think that the Florida Health Choices program is a valid choice by the state to overcome the federal government’s granting monopoly power over our pre-tax health dollars to our employers,” Graham said. “Employees of small businesses should not be forced to use health insurance chosen by their employers—a task that most small businesses would rather avoid anyway.”

Could Transition to Obamacare Exchange

Florida Gov. Rick Scott, a former health care executive, has rejected more than $19 million in federal funding to create an exchange under Obama’s law. Florida Health Choices’ chairman, State Rep. Aaron Bean (R-Fernandina Beach), has stressed this is not the aim of Florida’s program.

“We are not related to Obamacare at all,” Bean told the St. Petersburg Times.

Yet board members have publicly acknowledged the Florida Health Choices marketplace could become an insurance exchange under Obama’s law. Former Sen. Durrell Peaden Jr., who serves on the Florida Health Choices board, has publicly stated the plan “has the potential” to make that transition.

Graham noted the state could continue with the program, await the decision from the Supreme Court on the constitutionality of the federal health law’s individual mandate, and then choose whether to comply or shut down as the federal 2014 deadline approaches. But even with a different outcome from the Supreme Court, Graham says Floridians should not hope for too much.

“The experience of Utah shows that this kind of ‘marketplace’ does not attract many participants. So, despite Florida’s good work, I believe that we need tax reform to allow individuals to own their own personal and portable health insurance,” Graham said.