Into the Pool!

My friend and co-blogger Bob Vineyard tipped me to this story in a local Columbus (Ohio) paper:

“S.B. (Ohio Senate Bill) 272 would create a formal state corporation named the Ohio Health Insurance Risk Pool...The pool would offer a health insurance plan, providing up to $1-million in lifetime benefits. Health insurance premiums charged by the pool would be at least 125 percent but not more than 150 percent of the premium charged for "standard individual rates in the state," according to legislative documents.”

Now, we’ve discussed High Risk Pools before (here and here), and concluded that they did show promise. Our primary concern was whether one could be designed in such a way as to be meaningfully comprehensive, yet reasonably affordable. In other words, offer decent coverage, especially for pre-existing conditions, at a price that wouldn’t totally wipe out the family budget.

As written, SB 272 seems to address both of these concerns. Eligible folks (essentially those who have severe and/or chronic conditions which make them “unattractive” on the individual market) would be able to access a plan through the OHIRP. In reading through the bill and the analysis, the Pool would offer a product that looks a lot like the current HIPAA guaranteed issue plan, but with a somewhat lower premium cap.

The other thing that the bill does is to simplify the process. That is, it does away with the required “open enrollment” seasons, and essentially makes the whole year open enrollment. This is a good thing.

Why, you ask?

The current system is front-loaded. That is, carriers are required to offer a specific number of “slots” each year to “the uninsurable.” As Bob has pointed out, this represents a much smaller population than the punditry would have us believe. Still, some carriers seem to “fill up” earlier than others, leaving fewer and fewer choices. In theory, the Department of Insurance is supposed to track availability, but they’re not always up-to-date.

One good sign is that at least one of the plans will eschew all those state-mandated benefits that help to drive up cost while limiting choice. The result could be a more affordable alternative. It will be interesting to see if such plans make it through the vetting process.

I’m concerned, though, about the make-up of the board of directors of this new corporation, which include:

“two from insurers, one from the Ohio Association of Health Underwriters, one member of the general public, one representative of healthcare providers, one each from large and small business, and one state representative and one state senator.” [ibid]

I’d like to see at least one professional, independent agent on that board. We are on the front lines of this very public debate, and can offer a unique perspective: because we represent carriers, and work for our clients, we have a “birds-eye” view of the process.

“But Henry," you may interject, "the board includes a representative of the Health Underwriters. Surely that puts to rest your objection.”

No, it does not (and please don't call me Shirley). Although I co-founded our local chapter, and have had experience with the state, I am no fan of the AHU (nor its life insurance cousin). These organizations are run by -- and primarily for the benefit of -- the carriers, not the agent or the public. The interests of the Association and of agents do not often coincide. Including an agent who is not beholden to the special interests of an Association would solve this dilemna.

And stay tuned for Part 2, as well!