As he was gearing up to run for governor of Florida, Republican Rick
Scott emerged as one of the most vocal opponents of what he and others
began referring to as "Obamacare."
Scott created, chaired and bankrolled a group called Conservatives for
Patients' Rights that spent millions of dollars on TV commercials
attacking health care reform, especially a proposal calling for the
federal government to create a public health insurance option to
compete with private insurers.
In one ad, the narrator said the votes of a few key senators could
determine whether or not Americans would be able to keep their own
doctors and their own health insurance plans. The implication was
clear -- people would lose the ability to choose their own doctors if
health reform passed.
Trouble was, it wasn't true. The public option considered by the
Senate at that time would have affected relatively few Americans--just
three to four million, according to the Congressional Budget
Office--and it would have negotiated rates with doctors exactly as
private plans do. It would have been nothing more than an additional
option for some people. It would not have reduced choice for anyone.
But to hear Scott and his group tell it, it would have led to the
demise of choice and competition in health care.
Well, guess what. A few days ago, Scott, now governor of Florida,
said he had decided to reduce choice and competition that state
workers have enjoyed for years.
Florida state employees, who currently can choose among two or more
competing HMOs, are being told that all but one of their HMO choices
are being eliminated and that bureaucrats in Scott's Department of
Management Services (DMS) have already decided which HMO they will be
enrolled in come January 1, 2012.
DMS announced early last week that, "Following the Governor's
direction to reduce the size, scope and cost of state government, DMS
has awarded contracts for health maintenance organization services
that will save state taxpayers approximately $400 million over two
To save that kind of dough, Scott says his team is, among other
things, reducing the number of HMOs now offered "to the most efficient
for each countywide service area." DMS has picked four insurers--AvMed,
Capital Health Plan, Coventry and UnitedHealth--to provide health
benefits to state workers. The catch, though, is that those four
companies will not compete with each other for state employees in the
same county--or anywhere else in the Sunshine State, for that matter.
The big winner of the four appears to be AvMed, which DMS selected as
the sole HMO provider for 38 of Florida's 67 counties. UnitedHealth,
which says it currently provides HMO coverage to 47,000 state workers
in 66 of those 67 counties, appears to be the big loser. As you can
imagine, it is not at all happy with the prospect of making less money
off of Florida taxpayers. It filed a formal protest with the state a
few days ago, claiming that, despite what DMS says, Florida taxpayers
would have saved more money had the state allowed it to continue
competing for state workers' business.
AvMed's big win has led to some raised eyebrows and suspicions. In a
column headlined, "Rick Scott Lets His Pals Run a Monopoly on State
Employees' Health Care Coverage," the Broward-Palm Beach New Times'
Matthew Hendley wrote that AvMed "happened to be very friendly to
Scott on the campaign trail."
Hendley noted that, as first reported by Health News Florida, Scott
last year received $5,000 in campaign contributions "from people
associated with AvMed" and that the company itself donated $10,000 to
help pay for Scott's inauguration party earlier this year." Hendley
says there are no records indicating that any UnitedHealth executive
contributed to Scott's campaign.
Landing so much of the state's business could indeed be a windfall for
AvMed, a relatively small Florida-based company that, according to its
Web site, currently has only 320,000 people enrolled in its health
plans, including state employees and their dependents. (UnitedHealth,
on the other hand, has more than 30 million enrollees in Florida and
elsewhere. It is the nation's biggest health insurer in terms of
revenue and profits.)
Kristopher Purcell, director of communications at DMS, told me the
state covers more than 375,000 employees, dependents and retired
workers. While many are enrolled in a Blue Cross of Florida PPO rather
than an HMO, at least 30 percent of the "HMO contracts" will be
"disrupted" as a result of Scott's decision to eliminate competition.
By disrupted, Purcell means that those employees will have to switch
out of the HMO they are currently in to the one chosen for them by
DMS. If during the open enrollment period that begins on September 26
they do not proactively "choose" the HMO that has been chosen for
them, they will automatically be enrolled in the Blue Cross PPO, which
also stands to gain from Scott's decision.
Purcell said that while the premiums for the PPO should be comparable
to the HMO premium, people who are enrolled in the PPO will face
considerably higher out-of-pocket expenses.
Because each HMO and PPO has different provider networks, several
thousand state workers and their dependents will also face having to
change doctors. Purcell said the administration believes few people
will actually have to change doctors because the HMOs chosen for each
county will allow more doctors to join their networks.
That seems to be based on little more than hope and assurances from
the HMOs, however. One of the ways HMOs were initially able to slow
medical inflation was by choosing only doctors they wanted in their
networks and excluding many others. When HMOs broaden their networks
because of pressure from enrollees to include more doctors, HMOs lose
some of their ability to control those costs.
In any event, so much for choice and competition, which opponents of
the Democrats' vision of reform, including Scott, claimed would vanish
if "Obamacare" were enacted. It seems as if one of the leaders of the
anti-reform crowd wasn't a true believer in the value of choice and
competition after all.
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