Tuesday, October 05, 2010

Real Life ObamaCare@ Consequences: Buckeye Edition

At the risk of beating a dead horse, here's the current state of Ohio's individual health insurance market:

Aetna, Assurant, Anthem, Humana and Medical Mutual of Ohio (MMO) will no longer write any child-only policies (where "child" is defined as "under age 19"). MMO had not made this decision final until after the 23rd, so any such applications submitted have been returned. In addition, MMO is opening itself up to major adverse selection, er, uh....has announced that "dependents under the age of 19 who apply as new business and part of a family plan will be eligible for coverage year-round." In other words, no "Open Enrollment" necessary.

It actually gets a bit more convoluted, but that's the gist.

Anthem also addressed the grandfathering issue pretty much head-on, as well. Parents with grandfathered plans will be able to add their under-19 aged kids; they'll still need to submit an application for underwriting (to assign the proper risk category and price), but won't be subject to decline for medical reasons, and (disclosed) pre-existing conditions will be covered.

I predict that's going to be the next major battle-ground (or at least one of them), by the way. The new rescission rules are pretty clear-cut, so carriers are going to have a very real incentive to pay close attention to these "minor" apps.

How's that, you ask?


"Rescission is permitted only for an act, practice, or omission that constitutes fraud, or an intentional misrepresentation of a material fact, as prohibited by the terms of the plan or coverage. Rescission is not permitted in the case of inadvertent misstatements of fact." [emphasis added]

Who makes the call as to what was "inadvertent" and what was "deliberate?" Methinks that the application will be even more important for carriers going forward. This is another example of why having to "pass the bill to learn what's in it" is so fraught with danger.

[Hat Tip: FoIB T Shook
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