Legislators pass conflicting bills on health insurance industry

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By MARTIN DYCKMAN

© St. Petersburg Times, published April 1, 2001

TALLAHASSEE -- A freshman legislator's first bill is supposed to be something easy, like naming a park for George Washington, but for hers, Rep. Kim Berfield, R-Clearwater, has a tiger by the tail. She's trying to make out-of-state health insurance companies follow all of Florida's rules when they sell individual policies to people here.

Simple as that ought to be, it's one of the toughest acts in Tallahassee. Tom Gallagher tried during his first tour as insurance commissioner, and couldn't. Bill Nelson tried, and couldn't. Back at his old shop, Gallagher is trying again. Berfield has the bill in the House. Jack Latvala, R-Palm Harbor, who chairs the Senate committee on banking and insurance, is sponsoring the bill there. He drafted Berfield to handle it in the House.

She made a successful debut before the Health Promotion Committee Thursday, but there are two more committee stops to go.

Gallagher left the talking to Berfield, and she did fine. If she made any beginner's mistake, it was to let her star witness talk until time nearly ran out. But the witness was so compelling that no one -- except, perhaps, some squirming insurance lobbyists -- wanted to interrupt.

As she had to a Senate committee earlier, Shaneen Wahl of Port Charlotte told of purchasing a policy for herself and her husband that cost only $156 a month in 1991, but which ballooned to nearly $1,900 after she developed breast cancer.

What she had thought was a group policy, she said, turned out to be "a group of one."

"This is not real health insurance," she said. "It's like musical chairs. Do you know what the death spiral is?"

Committee members did. The term describes what happens to healthy people who buy individual policies at deceptively low rates, but who are charged outrageously as they age or get sick. By then, no one else will insure them.

An executive for Golden Rule, one of the industry leaders, all but admitted the low-ball sales technique.

"We need," he said, "to have very affordable front-end rates."

Wahl eventually negotiated a lower rate, but only by dropping her husband from the policy and taking huge deductibles. She had to drive to the company's office in Wisconsin to get that.

Rep. Irving Slosberg, D-Boca Raton, asked if anyone from that company was in the room.

A hand went up.

"You should be ashamed of yourself," Slosberg said.

When the fellow got to speak later, he said his company would pull out of Florida "immediately" if it had to follow the same rules as Blue Cross and other Florida-based underwriters. Golden Rule had already expressed a similar threat.

It isn't the fear of companies pulling out that has kept them in business here. It's the power of their lobbying and, sad to say, their campaign contributions.

Golden Rule ought to be named Golden Egg. Since 1995, Florida politicians have cashed more than $140,000 worth of its campaign checks. More than half, $87,950, has gone to the Republican Party for laundering before proceeding to various campaigns. The Democratic Party had to be content with $18,000 even though Sam Bell, a very prominent Democrat, is Golden Rule's chief Florida lobbyist.

But the tide is obviously changing, if only to the point where the out-of-state companies believe they have to appear more reasonable. They're offering a "pooling" plan that would combine policies with similar coverage -- but that's like Br'er Rabbit begging to be thrown in the briar patch. As Berfield pointed out to the committee, the companies would remain exempt from five other consumer protection measures Florida extends to in-state policies, including a ban on rate increases based solely on the number of years the policy has been in force.

Still, Berfield said she'd be "more than happy" to negotiate with the companies. But not at the price of delaying Thursday's vote, as some committee members wanted to do. They finally passed the bill, 10-2. Stay tuned.

The committee was, unfortunately, not as astute when it passed another bill by Rep. Frank Farkas, R-St. Petersburg. The bill creates "limited benefit" policies, primarily for employers who don't think they can afford more or who want them to back up medical savings accounts. But these policies would be largely exempt from oversight by the Insurance Department. Several committee members seemed startled by that, yet with no one on hand to oppose it, they let it go.

John Sinibaldi, an iconoclastic Pinellas insurance agent, had planned to be there but couldn't make it.

"What we have here," he e-mailed me, "is conflicting bills." With Berfield's, he said, "the legislators are saying that history shows the consumer needs protection, and that the industry won't play fair unless forced to do so. On the other hand, the legislators are saying that consumers don't need protection, and that the carriers can do whatever they d--- well please. Which is it?"

It's Florida, of course. What else to expect?

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