While Gov. Ron DeSantis and House leaders are enthusiastic about "shared savings" health-care programs, state economists are not so sure the programs will have a big immediate impact.
The programs are designed to give insurance policyholders an incentive to shop for cheaper health-care services and are allowed under a bill (HB 1113) signed into law last week by DeSantis.
Under the law, insurance companies and HMOs will be able to provide incentives for policyholders to use “shoppable services.” When services are obtained for less than what an insurance company would pay, the savings would be shared between consumers and the carriers.
State economists have taken a closer look at the law because any shared savings that insurance companies return to policyholders would reduce the insurers’ direct written premiums.
That’s important because health insurance companies pay a tax on written premiums. The tax is not paid by HMOs.
An initial analysis of the bill prepared during the legislative session estimated that 20 percent of the insured population would take advantage of shared savings offerings from their insurers. That same analysis projected flat enrollment growth in the programs.
State economists this month, though, cut the projected participation in half for the first year, bringing it to 10 percent, and allowing for 5 percent growth for the next two years.
“I think we all felt comfortable that a low level was appropriate … but we wanted escalating participation in it,” Amy Baker, who heads the Legislature’s Office of Economic and Demographic Research, said during a meeting in which economists from the governor’s office and the Legislature met to discuss the potential impact of bills on state revenues.
With 10 percent participation, economists predicted a potential $436,010 reduction in taxes collected in the 2019-2020 fiscal year, which starts Monday. That would increase to $682,791 in fiscal year 2020-2021 and reach $1.02 million by 2023-2024.
Under the law, shoppable services would be types of non-emergency care, such as clinical laboratory services, surgical procedures, obstetrical and gynecological services, prescription drugs and services provided through telehealth.
The law requires that a shared savings incentive may not be less than 25 percent of the total savings generated.
Insurers must quarterly credit or deposit the shared savings incentive amounts into flexible spending accounts, health savings accounts, or health reimbursement accounts. Insurance companies can also use the credit to reduce premiums. The incentives cannot “constitute income.”
At a bill-signing ceremony this month, DeSantis said the promise of receiving some sort of savings will motivate people to want to shop for health care and seek less-expensive services.
“Why would I want to go shop online if it makes no difference to me as a consumer?” DeSantis said. “If it’s just saving an insurance company money, I think a lot of patients would rather just have their time to themselves rather than doing this.”
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