Families slammed by steep rate hikes in the Healthy Kids plan can seek refuge in Obamacare

People priced out of Healthy Kids can join an Obamacare plan without waiting.

Published August 28 2015
Updated August 28 2015

Jim Fike was among the thousands of Floridans who feared their families would be stuck with a Florida Healthy Kids insurance plan — even though the rates will double come Oct. 1.

But this week brought some good news.

On Thursday, federal health officials said they would allow the 36,000 Florida families affected by the rate hikes to purchase a new plan on the Obamacare marketplace without having to wait for the Nov. 1 start of open enrollment.

"It gives us options," said Fike, an independent hardware salesman who lives with his girlfriend and 16-year-old stepdaughter in Spring Hill.

The Florida Healthy Kids program offers health insurance for children ages 5 to 18 whose families make too much money to qualify for Medicaid. It covers about 185,000 kids.

The coverage is subsidized for families making less than $48,500, with monthly premiums of either $15 or $20, depending on income. Families making more can enroll in the program, too, but must pay the complete monthly premium. The current amount for "full-pay" families is $140 a month per child.

For some parents, that's cheaper than purchasing coverage for their children through their employer or through an individual health plan on the Obamacare exchange. About 36,000 children have full-pay plans.

With the current provider contract expiring Sept. 30, however, Florida Healthy Kids recently had to negotiate new contracts for the subsidized and full-pay plans. The rates for the subsidized plans stayed the same. Rates for full-pay plans doubled.

Florida Healthy Kids CEO Rebecca Matthews blamed the spike on the new insurance regulations associated with the federal Affordable Care Act, also known as Obamacare.

"Despite the federal government's assurances that rates would drop and access would improve, insurance rates increased, many providers canceled coverage, and the makeup of our coverage was forced to change," Matthews wrote in a letter to parents Wednesday.

Federal health officials say the changes were for the better.

"Under the Affordable Care Act, health insurance plans cannot place lifetime caps on the amount of money spent by insurers on essential health benefits for a child," U.S. Department of Health and Human Services spokesman Ben Wakana said in a statement.

"The law also improved consumer protections by requiring that many plans cover essential health benefits, including trips to the emergency room, preventive services like screenings and vaccines, and dental and vision care for kids."

Still, Fike said the price hike "hit like a sledgehammer."

"You're talking $3,600 for one child, and that doesn't cover out-of-pocket expenses," he said, citing the annual premium for a plan with medical and dental benefits.

Fike said his family wouldn't be able to afford the increase. He immediately began calling insurance companies to see about buying a plan on the Obamacare exchange. But he was repeatedly told to wait for the start of open enrollment on Nov. 1, he said. And even then, the coverage wouldn't start until January.

That would mean a three-month gap between the time the Florida Healthy Kids plan ended and the new Obamacare coverage kicked in.

"We were locked out of any (other) insurance," he said.

Fike and his family are considering their next steps. He said he remains disappointed that the lower-cost Florida Healthy Kids plan is no longer an option.

Matthews, the CEO, said other Healthy Kids families were wrongly denied access to federal exchange plans.

The Health and Human Services department will announce details of the special enrollment period "in the near future," Wakana said.

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