Insurance Changes Loom For State Workers
Changes could be coming to the state employees’ health insurance program under a bill passed Friday by lawmakers.
Some changes --- including the use of a drug formulary --- could take effect next year if the bill is signed into law by Gov. Ron DeSantis. Other changes won’t take effect until 2023.
The measure (HB 1113) would require the state Department of Management Services to analyze its current contracts with health maintenance organizations, preferred provider organizations, and prescription drug programs and develop a plan to procure new contracts for benefits beginning in 2023.
Senate bill sponsor Manny Diaz Jr., R-Hialeah, said the state currently procures PPO contracts every five years, HMO contracts every three years and pharmacy benefit plans every three years.
“The lack of coordination is inefficient,” Diaz said.
The analysis and recommendations must be submitted to the governor, the Senate president and the House speaker no later than Dec. 1.
The measure passed the House by a 105-2 vote on the final full day of the annual legislative session. It cleared the Senate hours later by a 37-1 vote. Opposing the bill were Rep. Anna Eskamani, D-Orlando, Rep. Margaret Good, D-Sarasota, and Sen. Gary Farmer, D-Fort Lauderdale.
Sen. Bill Montford, a Tallahassee Democrat whose district is filled with state workers, pressed Diaz about some of the changes to the state employees’ health program.
“I want to make sure I know what I’m doing when it comes to state employee benefits,” Montford said. “This is new. Has it been discussed in any of our Senate committees before?”
Diaz acknowledged that the Senate had never discussed the proposed changes, which were a priority of the House.
The bill would authorize the state to limit the number of HMOs in the state program and allow for the plans to be competitively procured on a regional basis. The change is significant because more than half of the people enrolled in the program --- or 53 percent --- chose to enroll in an HMO.
The bill would authorize the Department of Management Services to develop rules related to the regions. Those rules would have to be ratified by the Legislature before taking effect.
The measure also 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 the program to stop paying for certain drugs, although the plan would allow physicians to order drugs if medically necessary.
House sponsor Paul Renner, R-Palm Coast, said the establishment of the formulary is expected to save $40 million.
The measure would also allow state workers to obtain drugs from Canada under an importation plan pushed by DeSantis.
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. 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.
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