Insurance rate hikes get lost amid raucous election cycle

TALLAHASSEE — Legislative candidates are making their final push to sway voters ahead of Tuesday’s primary, but one issue that could occupy much of their work next year and have a profound impact on Floridians’ pocketbooks isn’t getting much attention: rising insurance costs.

The top health, property and automobile insurance companies have filed for rate increases of as much as 30 percent with state regulators that would take effect next year. The hikes, some of which have already been approved, could cost consumers millions.

But an improving economy, the incremental nature of the rate hikes and the lack of a major hurricane in 10 years means the issue isn’t at the forefront of the minds of voters and candidates, as it was after the 2004-2005 storm seasons.

“People don’t think about [insurance rates] until the impact has already happened,” said Alice Vickers, director of the Florida Consumer Action Network, a consumer advocacy group.

The top five auto insurers in

the state — State Farm, Geico, Progressive, Allstate and USAA — have filed for rate increases ranging from 4.3 percent and 30 percent since 2015, according to data from the Florida Office of Insurance Regulation. For the top five property insurers — Universal, Citizens, Security First, Heritage and Federated National — rate requests range from 2.6 percent to 14.9 percent.

Fifteen health insurers have filed rate increase requests averaging 17.7 percent for individual Affordable Care Act plans and 9.6 percent for small group plans. The state insurance agency will finish its review of the rate requests in the next few weeks, agency spokeswoman Amy Bogner said in an email.

The cumulative effect adds up to a big dent in the wallet, Tallahassee resident Lee Pierce said.

“It affects your discretionary spending — we may not be able to go on vacation or have to cut back on expenses,” Pierce said.

Workers compensation rates are poised to jump next year, too. The National Council on Compensation Insurance requested a 19.6 percent rate increase after a Florida Supreme Court decision this year struck part of a 2003 law capping attorneys fees.

The sticker shock will directly affect workers as businesses adjust to higher costs, said Bill Herrle, Florida executive director of the National Federation of Independent Businesses.

“When rates go up, there is only one thing for a business owner to do to reduce those costs, and that’s to reduce his payroll,” Herrle said.

The reasons for the rate hikes are varied, and lawmakers have tried to address some of them in recent years but have met with limited success.

On auto rates, for instance, lawmakers passed a bill in 2012 aimed at clamping down on scams involving Florida’s no-fault personal injury protection laws, and capping payments to chiropractors and massage therapists. But after an initial dip in the first two years, rates are back on the rise.

Property insurers say their rate hikes are driven by abuses of water damage claims. Homeowners can sign over benefits to contractors in an emergency, such as when a water pipe breaks. Some contractors then bilk insurers, they say.

Upward pressure on health care rates is driven in large part by higher drug costs, but Republicans also blame Obamacare regulations. Democrats counter that expanding Medicaid — something Florida House Republicans have rejected — could alleviate some of the costs.

Unlike tax rates, lawmakers can’t dictate costs for the insurance industry, which is a private but heavily regulated business. Still, legislative decisions have a big impact on the bottom line for consumers, insurers, businesses and trial lawyers.

“It’s why we’re so engaged in the primary and the general election,” said David Hart, executive vice president of the Florida Chamber of Commerce. He added that he expects the Chamber to push for bills to address the workers compensation and property insurance rate hikes. But he said complex insurance issues don’t always drive voters to the polls.

Insurance companies and trial lawyers often do battle over legislation, but consumer advocacy groups such as the nonprofit, nonpartisan Florida Consumer Action Network, which doesn’t give to campaigns and political committees, say they’re often left out when it comes to creating new laws.

“There rarely is a voice for consumers,” said FCAN director Alice Vickers. “It’s hard to gain any traction for a lot of these issues.”