Discount Medical Plan Hearing Presentation

1. Discount Medical Plan Hearing Presentation • FAHP thanks the Office of Insurance Regulation and Commissioner Kevin McCarty for scheduling this important hearing on Discount Medical Plan Organizations. • Thank you for inviting me to present FAHP’s input today.

2. Discount Medical Plan Hearing Presentation • FAHP represents 22 health plans both PPOs and HMOs in the State of Florida. • Our plans insure over 8 million citizens in the State of Florida. Some of our health plans offer regulated discount medical plans in conjunction with or supplemental to health insurance coverage. • Our plans contract with over 40,000 health care providers including physicians, hospitals, laboratories, and other health care providers.

3. Discount Medical Plan Hearing Presentation • The DMPO law and regulation adopted by the OIR have served an important purpose in regulating a market that was previously unregulated and subject to abuse. The prior DMPO marketplace needed regulation as certain market entrants misrepresented their offerings and took advantage of some Florida residents. • Most important are regulations that protect consumer from being mislead to believe that DMPOs offer the same protections as health insurance. • Due to OIR’s implementation of Part II, Chapter 636 Florida Statutes, we have significantly reduced the number of questions and complaints that our plans have received since the regulations took effect in 2005.

4. Discount Medical Plan Hearing Presentation • The types of DMPO complaints our plans were made aware of included: • Confusion over whether or not individuals had purchased insurance • Complaints about providers refusing to honor discounts • Lower discounts on services than were promised by the plan • High pressure sales techniques • Recently, we have become aware of plans that have unbundled their discount cards in order to avoid compliance with actuarial certification regulations that protect consumers and weed out the illegitimate discount cards from those that offer value.

5. Discount Medical Plan Hearing Presentation • FAHP is aware that regulated DMPOs that: • Have set fee schedules that are published • Have published and accessible provider networks • Offer real discounts in relation to the price of product Are an important market segment, and coupled with health insurance, have an important role in a consumer directed portfolio of products that include high deductible health plans, health savings accounts and HRAs, and transparency of health information.

6. Discount Medical Plan Hearing Presentation • FAHP supports current regulations and additional regulations that will not serve as a hindrance to innovation and specialized discount plans that offer real value to the consumer. • FAHP supports efforts to educate consumers of the purpose and value offered by discount cards so that they can be aware of how these DMPOS fit into a portfolio of products that include insurance and tax favored health accounts. • FAHP supports both regulation and education that protects and informs consumers from being mislead to believe that DMPOs are health insurance or offer the same protections as health insurance. • FAHP supports full transparency of health information including full disclosure of DMPO networks and discounts to the consumer. • Thank you again for scheduling this meeting and inviting me to speak today.