Citizens insurance hike reveals Florida's needless cruelty to those in need | Commentary

In just about 26 minutes on Wednesday, the well-to-do group of political appointees who oversee Citizens Property Insurance Corp., Florida's state-backed insurer of last resort, approved drastic rate increases for policyholders who renew next year, equating to hundreds of dollars in extra premium costs for most of the insurer's 1.2 million customers.

That short meeting perfectly encapsulated the corporate cruelty of Florida government: That Citizens is inflicting pain on its customers is no accident. Judged by the prevailing mood during Wednesday's board of governors meeting, it was a reason to celebrate.

And that's because the state's elected leaders don't see Citizens, Florida's largest insurer, as a powerful tool to help floundering homeowners in Florida's failed insurance market but as an albatross, and they don't view its customers as people in need but as numbers on a spreadsheet they'd rather delete. Instead of leveraging a viable public insurance option to help homeowners who are drowning in skyrocketing costs, state officials are myopically focused on kicking them off it. The result is "depopulation," a clinical euphemism that in practice means coercing Citizens customers into entering a chaotic private marketplace that has failed Floridians for years, and in which they may well end up paying even higher rates.

This is what it looks like when elected leaders place ideology and campaign contributions ahead of good sense and concern for their own constituents.

The sentiment during Wednesday's meeting was not regret or anger over the double-digit hikes, which, if approved by regulators, will be borne by many people with no other realistic options. Instead, as has become customary in Gov. Ron DeSantis' Florida, sycophancy trumped lived reality: Several members of Citizens' board of governors brazenly hailed state leaders for implementing industry-backed insurance reforms last year even as those changes did nothing to stave off painful increases — in some cases, the highest-possible 14 percent increase Citizens can levy — for much of the company's customer base. "I'm sure the news will be about the proposed rate increase," board member M. Scott Thomas, a Jacksonville attorney, dismissively noted, before heaping praise on Florida's elected officials for enacting "reforms" that make it harder for policyholders to sue insurance companies when they believe they were shortchanged on coverage.

For Citizens' customers, there is no good news, even when the insurer's costs of covering a community go down.

The increases approved Wednesday, for example, are artificially high for many thousands of policyholders in South Florida — a kind of illusion, albeit one with severe real-world consequences, designed to prop up private insurers.

One of those industry-backed insurance "reforms" the governor and Legislature implemented last year prevents Citizens from simply charging what it needs to cover its anticipated obligations in the future, the way one might expect an insurance company to price out its coverage. Instead, Citizens must also make sure its rates are not too low, otherwise — gasp! — private insurance companies might lose customers to Citizens.

So instead of being able to offer customers in Miami-Dade a 4 percent decrease next year, which a Citizens staffer told board members would be enough to cover its obligations, Citizens instead had to recommend a 14 percent increase because its rates can't be too competitive with private insurers who are charging far higher rates. Read that again: A 4 percent decrease became a 14 percent increase because of these much-ballyhooed insurance "reforms."

For South Florida policyholders, it's a no-win dilemma. Staffers estimated that Citizens' rates in Miami-Dade would have to jump by more than 82 percent to become truly "non-competitive" — which they define as ensuring Citizens' rates are more expensive than 7 out of 10 private insurers. But Citizens can only ask for a 14 percent rate increase in any given year, not 82 percent, so that's what Miami-Dade customers will be getting if state regulators approve the rate hike even though the cost of servicing those customers went down.

Citizens' rates are apparently destined to rise in perpetuity almost by default, with nary a peep from the board of governors about that sad reality for the 1 million-plus customers who will have to shell out hundreds more or face the prospect of being priced out of their home.

In real terms, that 14 percent increase means a Miami policyholder who paid $5,011 this year would pay $5,710 next year, according to figures Citizens staff presented to the board of governors. Rates in Broward could have been kept effectively flat, but the competitive analysis required a 14 percent jump as well. Palm Beach could have gotten a 9.8 percent increase but for this requirement, so they, too, are getting a 14 percent increase.

Despite Citizens' allegedly too-low rates, an S&P analysis found the public company still posted net income of $746.5 million last year.

This all should have raised some natural questions among the board of governors: Instead of demonstrating the virtues of the private sector, this competitive analysis simply shows how poorly served many Floridians are by the state's out-of-control private insurance market. It also reveals how well positioned Citizens is to actually help people, were Florida's elected leaders not entirely dedicated to a special-interest-driven project to gut the public insurer. And in a fitting coda, a Citizens staff memo noted that the "non-competitive" analysis did not include rate decreases announced earlier this year by several private insurers.

Speaking of governors, asked at a Wednesday news conference about Citizens' insurance hike, DeSantis basically shrugged. And — big shock — he blamed it all on the president. "We still have inflation in this country," he caterwauled, before noting that his drive-through McDonald's meal was more expensive, too.

DeSantis often confronts unflattering narratives with this same breezy dismissal. Last week, when devastating, historic rains sank Miami, his aides rushed to social media to say this was just the rainy season — any critics of his reactive posture toward the many ecological and humanitarian disasters unfolding and that are set to unfold are chicken-little scolds who expect DeSantis to change the weather.

And although COVID-19 serves as a kind of creation myth in the DeSantis canon, the ugly reality is that more than 93,000 Floridians died from it — a grim statistic that any leader, regardless of their opinions on masks and vaccines, or their own self-evaluation of their success in navigating the pandemic, ought to publicly mourn. DeSantis simply never mentions it. What's he supposed to do? Care?

And so Citizens, a perfectly functioning, viable public option for Floridians in need of affordable insurance — a public company that has existed and served as a linchpin in Florida's insurance market for decades, all somehow without turning the place into a collectivist penal colony — must self-immolate and throw its customers to the wolves because of vibes. And hey, the price of the governor's Big Mac rose too, so get over it. We're all suffering.

Such is life — and death — in DeSantis' Florida.

Nate Monroe is a Florida columnist for the USA Today Network. Follow him on Twitter @NateMonroeTU. Email him at nmonroe@gannett.com.

This article originally appeared on Florida Times-Union: Citizens insurance hike reveals Florida's needless cruelty | Commentary