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Letter to Governor Rick Scott - Tallahassee Bill Stops Insurance Commissioner from Killing Rate Hikes


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A new bill passed by Florida's Republican-controlled Legislature will leave consumers at the mercy of health insurance companies, allowing insurers to raise rates between 10 percent and perhaps as high as 70 percent over the next two years, according to U.S. Sen. Bill Nelson (D-FL).

So Nelson, Florida's former treasurer and insurance commissioner, is asking Gov. Rick Scott to veto the deregulation measure. Even before passage of the measure ( Senate Bill 1842 ), insurers were telling some brokers to expect that individual premiums in Florida could go up 35 percent to 50 percent, according to the Wall Street Journal.

In essence, the new state law strips Florida's current insurance regulator of any ability to approve, modify or reject rate hikes by health insurance companies for the coming two years of 2014 and 2015 in the new insurance exchanges required by the federal healthcare law.

"To eliminate the Florida insurance commissioner's authority to turn down rate increases is unbelievable and unconscionable." Nelson wrote in a letter to Scott today.

Florida's Republican legislative leaders claim their bill is meant to let federal authorities oversee rates in the wake of the federal Affordable Care Act (ACA) dubbed by opponents as Obamacare. But critics of the move to deregulate health insurers at the state level, including insurance watchdog groups, contend it's a partisan move to let insurers raise rates unchecked, or possibly gouge consumers and then blame it on the federal health care law.

"Senate Bill 1842 brings bad news for Florida consumers in at least two distinct ways: it deregulates health insurance at the state level, putting consumers at risk; and, it sets up ACA to be blamed for Florida's irresponsibility," the health care watchdog group called FloridaCHAIN says on its website.

The watchdog group has also been critical of the state for returning over $1 million in funding from the federal government to cover the state's cost of overseeing rates under the new federal health care law.

And, Nelson's office noted today, the state has not applied for up to another $5 million in federal grant money intended to help consumers with the new health law.

Nelson is no stranger to dealing with health insurance companies. In the mid-1990s he served on the Florida Cabinet as state Treasurer and Insurance Commissioner. In that capacity he regulated the insurance industry, earning a reputation as a strong consumer advocate.

The Florida Democrat says the state historically has been a model for having tough regulations on health insurers, but the bill now awaiting Scott's approval or rejection would take the state backwards.

Following is Nelson's letter to Gov. Scott:

May 22, 2013

The Honorable Rick Scott
Governor of Florida
The Capitol
400 S. Monroe Street
Tallahassee, FL 32399

Dear Gov. Scott:

I urge you to veto Florida Senate Bill 1842. The bill, in essence, allows health insurers to raise rates for the next two years without the approval of the state's insurance regulator. I am told this will result in rate increases ranging between 10 percent and 70 percent.

As you may know, critics of this legislation contend it's politically motivated to let rates increase after the main provisions of the federal Affordable Care Act take effect in 2014.

Having previously served Florida as state Treasurer and Insurance Commissioner, I am extremely concerned about the consequences of insurance deregulation. To eliminate the Florida insurance commissioner's authority to turn down rate increases is unbelievable and unconscionable. In these difficult economic times, the state should not be taking a step backwards when it comes to protecting consumers.

So, in the public interest, I believe it's necessary for you to veto this bill.


Bill Nelson

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