Trimming Ohio’s uninsured hinges on open enrollment cuts, some higher overall rates

Updated 9:20 a.m., Feb. 5

COLUMBUS, Ohio — Nearly half of the state’s planned reduction of the uninsured relies on capping the costs of open enrollment and getting Ohioans who have individual insurance to accept that their rates would increase by an average of 5.5 percent (pdf).

Open enrollment is a period in which anyone can apply – and get accepted – for insurance. But state officials and watchdog groups have said costs for the elderly and ill are so high during open enrollment that it’s basically impossible for them to take the policies.

So the Department of Insurance proposes cutting open enrollment rates between 50 percent to 70 percent, depending on the applicant. But to subsidize those cuts, insurance rates for roughly 400,000 Ohioans who purchase their own insurance would increase by an average of 5.5 percent.

The 7 million residents who get insurance through their employers would not see an increase, and neither would those who get insurance through Medicare.

Ohio Gov. Ted Strickland said in his State of the State address that he wants 110,000 fewer uninsured Ohioans by 2011. Reforming open enrollment would insure 52,000 more Ohioans, according to the Department of Insurance.

“Because the insurance companies will be accepting people in open enrollment who are a higher risk, we need to spread the cost through the individual market,” Doug Anderson, the department’s chief policy officer.

Two other proposals would reduce the number of uninsured, which is thought to at least be between 1.3 million and 1.5 million adults and children.

All employees would by 2010 be able to pay for  health insurance with pre-tax money from their paychecks, using a federal rule known as a Section 125 cafeteria benefits. The state estimates it would cut the cost of coverage by 40 percent and insure another 37,000 people.

The state also plans to couple a tax incentive with a proposal to expand dependent child coverage to age 29. Twenty-one thousand more Ohioans could get insurance if the change is approved, according to the state. The proposal also expands a state tax deduction for employer-sponsored coverage to all family and dependent policies, which would cost the state $6 million.

These proposals are a compromise of sorts as state leaders genuflect to the economic realities of the time. A state panel in July had recommended greater reform: a health-insurance overhaul that included $687 million to cover mandatory cuts in insurance premiums, a requirement that anyone who could afford insurance get minimum coverage, and subsidies for low-income residents to afford insurance.

“We realized in this fiscal environment, we couldn’t do the market reforms,” Anderson said.

Proposed changes by the state don’t solely address cutting the uninsured population. The changes also would deliver greater authority to the Department of Insurance.  And they would create the Ohio Health Care Coverage and Quality Council to oversee health reform and implement a $300,000 study to look long-term at how to pay for health care.

Also, the department would be able to order an independent review of denied insurance claims – something it currently cannot do. It would take over the collection of some insurance data that it used to gather with the Department of Health.

The proposal also sets aside $20 million to expand the use of electronic medical records. Anderson said providing that funding would trigger additional funds from the federal government that could be as much as 10 time the state’s investment.

The reforms would cost $26 million: $20 million for electronic medical records and $6 million to pay for a tax incentive that would entice 29-year-old-and-younger dependents to get on their parents’ health coverage.