MIAMI -- A Coral Gables-based health insurance company, and dozens of its employees, are the latest victims of a Republican-led legislative gambit in 2014 to undermine the Affordable Care Act -- a maneuver for which presidential hopeful and Sen. Marco Rubio of Florida has taken credit on the campaign trail.
Preferred Medical Plan filed notice on Wednesday that the private insurance company intends to layoff 162 employees in February, according to the Florida Department of Economic Opportunity.
The company will remain in business, said James Card, a spokesman. Preferred Medical will cover a much smaller number of Floridians -- in large part because of a significant reduction in payments that the company expected to receive under the health law.
"Preferred Medical was prohibited from participating on the 2016 (ACA) exchange," Card said in a written statement.
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The reason: The federal Centers for Medicare and Medicaid Services or CMS could not pay the health insurer what was promised under the so-called Risk Corridor program., a risk-sharing arrangement that Rubio calls a "bailout" of insurance companies.
The Risk Corridor is a temporary program under the health law that was designed to protect health insurance companies against taking on patients who were too sick during the first three years of the ACA exchange, also known as Obamacare.
Since health insurers did not know enough about the people who would enroll for health insurance through the ACA exchange, and they had little to no data to help them set rates, the health law envisioned a program that would help the companies stay solvent as they adjusted their rates.
The 2014 legislation championed by Rubio restricted the Obama administration's legal authority to make payments to insurers under the program.
As a result, CMS said in October that the government would pay only $362 million of $2.87 billion in claims for 2014, or about 12.6 percent of any health insurer's expected payment -- an announcement that led to the collapse of health insurance co-operatives in several states, and to the reduction of health insurance carriers participating in Obamacare.
The U.S. Department of Health and Human Services has said that the government will pay insurers the full amount of their claims in subsequent years.
Rubio's Senate office did not immediately respond to a request for comment. In November, the Florida Republican senator drafted a letter to Congress claiming he had saved taxpayers $2.5 billion and urging Congress to continue restricting the Risk Corridor program.
"So far we've succeeded in stopping the Obama Administration from bailing out health insurance companies under ObamaCare," Rubio wrote in the letter, "and it's critical that Congress once again stand with taxpayers to stop any taxpayer-funded bailout of health insurers from happening."
Preferred Medical said it worked with Florida insurance regulators, CMS and representatives in Washington, D.C. to remain on the ACA exchange.
However, according to the company's press statement: "CMS has maintained its position that Preferred Medical Plan not be allowed to participate on the (ACA exchange) due to the funding shortfall created by CMS not paying the Risk Corridor payment."
The result is Floridians now have fewer carriers to choose from on the ACA exchange, a dynamic that leaves consumers with fewer choices of insurers and that health economists say likely will lead to higher premiums.
Preferred Medical offered coverage in 2014 and 2015 through the ACA exchange and through the state's Medicaid managed care program.
In total, the private insurance company enrolled about 100,000 Floridians in 2015 -- nearly all of them in Miami-Dade, according to the Florida Office of Insurance Regulation's quarterly managed care report.
The company's coverage reach has diminished dramatically since the summer. In August, Preferred Medical sold its Medicaid line of business to Molina Healthcare of Florida for $8.2 million, a transaction that involved the coverage of about 23,000 individuals.
An estimated 75,000 residents of Miami-Dade and Broward were covered under Preferred Medical's Obamacare plans during the first half of 2015, according to state filings.
The company is not the only carrier leaving Florida. Cigna Health announced in October that the company would no longer offer coverage on the ACA exchange in the Sunshine State due to high costs associated with fraudulent substance abuse treatment centers.
Florida insurance regulators issued an alert on Wednesday, urging consumers with Obamacare coverage through either Preferred Medical or Cigna Health to take action immediately and select another plan.
Because those carriers have left the ACA exchange, consumers covered under those plans will not be automatically re-enrolled in coverage. But HHS has extended the deadline to begin or renew ACA exchange coverage that begins on Jan. 1 until 11:59 p.m. PST on Thursday.
"A majority of these affected policyholders are located in the South Florida region," according to the alert.