Thursday, March 03, 2005

Promising New Legislation – Part II

In Part I, we discussed the first three major areas of HB and SB 5. In this post, we’ll explore the other two areas under consideration. To refresh your memory, these would be:
- Health care providers would be required to provide consumers advanced notice of health care services costs
- Proposes an analysis of a high-risk pool as a health insurance option for uninsured Ohioans, and further analysis of how to increase participation in small employer purchasing alliances.
The first item is interesting. According to my friend Bob in Hotlanta, this is being proposed in Georgia, as well: SB83 would “require hospitals and medical facilities to provide estimates of charges to patients.” I’m kinda ambivalent about this. On the one hand, when I walk into McDonald’s, there’s a sign that tells me how much that Big Mac is going to cost. So how come I can’t walk into my doc’s office and get the same thing?
Well, for one thing, everyone pays the same amount for a Big Mac; i.e. there’s no “Burger Network” or HMO. But based on contracts and negotiations, there may be a significant variation in what different patients pay, depending on with whom each is insured (just ask Anthem insured’s going to their Premier doc’s).
Finally, it’s interesting – and a little frustrating – that Ohio is one of the few states that do not currently have a high-risk pool for uninsured folks. Certainly the market is profitable enough to support this (such pools are generally funded by insurers writing business in a given state). So that’s a positive development.
I’m reserving judgment on the employer purchasing alliances. There’s an awful lot of misinformation out there about these. For one thing, they look a lot like MEWA’s to me. For another, I have often been struck by how many people buy into the “low group rate” mantra, without understanding that this is a classic oxymoron. Benefit for benefit, group plans are generally MORE expensive than individually issued plans. Why? Well first, because of the state mandated benefits built into such plans (see Part I below). Chief among these is maternity coverage, which is almost always excluded under individual plans. Finally, group insurance is guaranteed issue; that is, except for certain marketing restrictions (minimum size, participation, industry type), group carriers must issue plans to even sickly groups with high claims. Individual plans can exclude conditions, and even decline coverage.
This is definitely the “must-watch” legislation of the current session.
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