Tuesday, November 10, 2009

Wishful Thinking: Ohio Edition

If, as we've maintained here at IB, the states comprise 50 individual laboratories for health care "reform," then it makes sense to look at how these "experiments" are going. Case in point: Ohio's recently enacted HB 1 which the Department of Insurance claims, among other things, will result in some 52,000 currently uninsured Buckeye's gaining coverage.


Immediately upon its implementation, I received this in an email from Anthem:

"Effective January 1, 2010, Anthem Blue Cross and Blue Shield will no longer offer the HIPAA-HIC (basic and standard) Open Enrollment plans in Ohio."

So what does this mean, exactly?

Currently, Ohio citizens who are either Federally Eligible Individuals (i.e. folks who were eligible for COBRA continuation, elected it, and "rode it out" for the maximum 18 months) or have been declined for individual medical insurance are offered specific, state-designed plans. Anthem was, of course, the go-to carrier for them, since it offered several "flavors" at almost-reasonable prices (although that last is debatable, they were certainly competitive). In addition, Ohio gives each carrier a "quota" of such policies to sell, based on market share. Since they're the 800 pound gorilla, they "got" the lion's share of this business [ed: way to mix those metaphors!].

Because HB1 set new - much lower - premium differentials for these plans, they become even less profitable for the carrier. If it sounds like I'm taking the carriers' side in this, it's because (for once) I am: the free market works when the government doesn't meddle. In this case, "meddling" means further restrictions on the companies' ability to make a profit, which means they're going to shed the less profitable business as quickly as possible.

What that means to insureds is that they'll have less choices, and there will be fewer "slots" available (supply and demand). It's not as if these things fly off the shelves to begin with, but they were at least a viable alternative to those with serious, chronic health issues.

So what's the lesson here? When you restrict carriers' ability to compete in the market, consumers end up with fewer choices. Maybe that was the point of this exercise (wonders the cynic), but it certainly does not bode well for similar efforts on a national scale.
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