The latest rollout of the federal health care overhaul offers consumers a rebate if their insurers spend too little on actual medical care and too much on administrative costs.
But Floridians may miss out on the rebates that will start in 2012.
Pressed by the insurance industry, state regulators will soon ask the federal government for a waiver from the requirements, which begin Jan. 1.
The Florida Office of Insurance Regulation confirmed Tuesday it will request a reprieve until 2014, when the health care law's coverage guarantees kick in.
In a written statement, the office said enforcing profit limits in 2011 could "disrupt" the insurance market in Florida, where 4 million people are uninsured. Commissioner Kevin McCarty was not available for questions.
The state already is suing to overturn the health care law.
The new requirements are supposed to help increase the value of coverage for consumers and make health insurers "more accountable" by publicly reporting spending and premiums, federal health officials say.
Consumer advocates, such as Consumers Union, publisher of Consumer Reports, largely consider the requirements a win. The idea of a waiver — similar moves are afoot in Georgia, Iowa, Maine and South Carolina — got a tepid response.
"We generally feel the industry does cry wolf," said Walt Dartland, executive director of the Consumer Federation of the Southeast. "Our position is generally when we have an issue like this, we're against the waiver — you've got to prove that."
Essentially, the rules require insurers that offer small group and individual health plans must spend 80 percent of their revenue on care outside administrative costs. Large group insurers — plans covering 50 or more people — must spend 85 percent of their revenues on care.
It's called the "medical loss ratio." If it's too high, rebates will become due in 2012 in an account credit or payment.
Nationally, 9 million people would be eligible for rebates averaging $164 for individual policies, according to the U.S. Health and Human Services Department. Group plan figures weren't available, nor were Florida rebate values.
The new rules announced Monday apply to 75 million Americans. Self-insured plans aren't included.
Currently, Florida requires insurers to operate at 65 to 70 percent loss ratios. The insurance office plans to ask for a waiver for the small group and individual markets, though it said it needs at least two more weeks to finish the request. U.S. Health and Human Services Secretary Kathy Sebelius would decide whether to grant it.
After months of federal review, insurers won breaks but failed to get a broader array of business costs factored into medical spending. For example, plans with fewer than 75,000 members will get adjustments to help them comply, and ones with fewer than 1,000 members will be exempt from the rebates.
Nearly all taxes can be figured into the ratio, as well as spending to improve health care.
And states can win waivers to use lower rates if they show insurance would be disrupted by higher requirements.
Florida insurance executives complained the tougher requirements will disrupt their finances and limit their ability to insure people.
Without a waiver, some insurers could be forced to lower their rates to meet the threshold or find a creative way to pay for rebates, said Blue Cross Blue Shield of Florida executive Randy Kammer, a member of the industry-dominated Florida Health Insurance Advisory Board, which endorsed a waiver in September.
Blue Cross Blue Shield of Florida, the state's largest insurer, expects to meet the requirement. A nonprofit, the insurer faces less financial pressure from Wall Street, said Kammer, vice president for regulatory affairs and public policy.
But others face steeper costs. About 45 percent of people nationally who buy their own insurance are in plans exceeding the limits, according to federal officials
An analyst for Citigroup estimated last month that Golden Rule, a subsidiary of United Healthcare, would face $38.1 million in rebates for its 119,000 insured Floridians, based on 2009 figures.
That's a $319 average rebate in Golden Rule's biggest state.
At a Sept. 24 state hearing to gather evidence for the waiver, Golden Rule vice president Mike Corne warned that customers could face fewer options for insurance because of the crunch imposed by tougher profit limits.
Customers, who often seek Golden Rule individual policies absent a workplace plan, could find fewer companies willing to add new policies, and fewer businesses seeking a place in the market, said Corne, arguing for a phased approach.
"We will figure out how to adjust our business model, but I think we would be better off with handling this over time," Corne said.
David DeCamp can be reached at [email protected] or (727) 893-8779.