Health insurance changes eyed for state workers

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"Costs of providing benefits are significant, with total expenses for the coming year expected to exceed $ 2.8 billion."

Florida lawmakers are poised to overhaul how tens of thousands of state workers obtain prescription drugs, forcing employees to use a drug formulary starting in January.

Lawmakers tacked the requirement onto a health-insurance bill with little debate. The measure would also allow state workers to obtain drugs from Canada under an importation plan pushed by Gov. Ron DeSantis.

The legislation also lays the groundwork for changing rules regarding how health maintenance organizations contract with the state’s mammoth health insurance program beginning in 2023.

The late-session moves came as it remains unclear how officials plan to implement another set of changes to the state health insurance program that lawmakers authorized two years ago.

Senators approved the revised proposal (HB 1113) on Wednesday, but it must go back to the House for a final vote. The initial bill proposed changing state insurance laws to require insurers to offer health plans with “shared saving programs.” The programs encourage customers to shop for health care in the hope of finding less expensive care.

But Senate bill sponsor Manny Diaz Jr., a Republican from Hialeah, pushed a lengthy amendment to the measure that broadened it to include changes to the state employees’ health insurance program.

One of the changes would wipe out a two-decade prohibition on the state establishing a prior-authorization or formulary program for employees. Generally, a formulary is a list of prescription drugs covered by insurance plans. If the change is signed into law, the state must put in a formulary that would allow it to stop paying for certain drugs, although the plan would allow physicians to order drugs if medically necessary.

The legislation also would direct the state Division of State Group Insurance to analyze the efficiency and effectiveness of HMO coverage for state employees on a county, regional and statewide basis.

Based on that analysis, the division would make recommendations to the governor, the Senate president and the House speaker about areas that are deemed the “most efficient and effective to provide health insurance coverage for the 2023 plan year.”

Florida offers health insurance benefits to employees, retirees and their dependents. Economists in March projected enrollment in the program at more than 179, 000 people. Nearly 53 percent of those people were enrolled in HMO plans, according to economists.

The costs of providing benefits are significant, with total expenses for the coming year expected to exceed $ 2.8 billion.

Of that, $780.9 million is spent on prescription-drug claims, excluding money spent on pharmacy benefit managers.

And the costs are expected to jump in the future. Economists in March predicted the costs for prescription drugs would increase to $885.6 million, excluding pharmacy-benefit manager costs, in fiscal year 2020-2021 and would top $1 billion in fiscal year 2021-2022.

To keep those costs in line, the bill would require the state to include the drug formulary beginning next year. The bill also would make clear that state employees could — on a voluntary basis — take advantage of any drug importation program the state establishes. Though the Legislature passed a bill authorizing the establishment of two drug importation programs, they require federal approval. It’s not clear when, or if, that will happen.

The bill comes after House Republican leaders in 2017 successfully championed a measure that, among other things, required the state to redesign its health-insurance options and begin offering more high-deductible plans. In exchange for choosing the less expensive, high-deductible plans, the law envisioned allowing workers to pocket the savings by taking home higher pay.

But an analysis obtained by The News Service of Florida showed downsides in moving ahead with the plan redesign. Analysts with the consulting firm Foster & Foster, which conducted the review, warned that introduction of pared-back high deductible plans — along with pre-tax health-savings account contributions — could entice about 29,000 employees to enroll in the state program after turning down coverage in the past.

If that were to occur, savings associated with the redesign could be offset by increases in enrollment.  Additionally, the analysis showed that monthly premiums for employees could increase and benefits could decrease as the state redesigns the plans.

DeSantis did not include changes to the employees’ health-insurance program in the proposed budget he submitted for the upcoming year.

Foster & Foster was hired by the Department of Management Services to conduct the review of the state insurance program. The House on Jan. 7 hired a different consulting firm — AON — and paid it $120,000.

The contract required AON to help the state transition from its current employee-benefits package to one that offers a “more meaningful choice among health benefit plans and the option to elect more meaningful choice among health benefit plans and the option to elect enhanced compensation through either health savings and reimbursement account contributions or increased salary payments in lieu of more generous benefits.”

The contract also required AON to provide “strategies” to account for Foster & Foster’s finding that potentially 29,000 employees who previously turned down coverage may enroll in the program.

According to the contract, a draft copy of the report was due to the House by Feb. 1 and a final copy of the report was due by Feb. 15.

The News Service of Florida has made repeated public-records requests to try to obtain copies of the reports.


Republished with permission of the News Service of Florida.

Christine Jordan Sexton

Tallahassee-based health care reporter who focuses on health care policy and the politics behind it. Medicaid, health insurance, workers’ compensation, and business and professional regulation are just a few of the things that keep me busy.


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