Ohio's state budget to boost consumer costs for individual insurance policies : Sarah Jane Tribble
By: Health Insurance
Submitted: 2009-09-02 14:55:05 | Word Count: 599
When Ohio's state budget finally passed in July, 250,000 Ohioans with individual health insurance policies quietly lost a battle.
Premiums on such policies will go up next year -- state officials estimate an average of 4 percent. That extra amount will offset the cost of lowering the premiums within the state-regulated open enrollment program, in which companies provide coverage for those with pre-existing conditions.
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The change takes effect in January and will not affect group policies such as those bought through an employer.
Kelly McGivern, president and chief executive of the insurance trade group Ohio Association of Health Plans, fears that prices on individual policies will increase more than the estimated 4 percent.
She says her group did its best to raise what it saw as "the pitfalls" of increasing individual policy premiums. The higher costs will hit during a poor economy and while widespread layoffs have made individual health insurance policies more in demand than ever.
"We have new consumers every day," said Ellen Laden, spokeswoman for UnitedHealthcare's Golden Rule Insurance Co. Though, she added, there are still many consumers who decide to drop current coverage or forgo purchasing health insurance.
Insurers in Ohio who sell individual policies are required by law to offer policies for those with pre-existing conditions. However, the insurers only sell those special policies for 30 days at a time, and there is no set time of year the policies can be bought. Currently, there is no limit on how much an insurer can charge.
There are now only 1,300 people statewide who have purchased open enrollment policies, and those customers pay, on average, $800 to $850 a month for individual health coverage. In contrast, Ohioans with no pre-existing conditions pay an average of $300 a month for an individual policy.
Douglas L. Anderson, chief policy officer for the Ohio Department of Insurance, said that the new state budget rules will force those open enrollment rates down by 50 percent to 70 percent, making the open enrollment program more affordable for another 14,000 people.
During the final hours of negotiations on the state budget, there was so much industry concern about how much the expanded open enrollment's costs would drive up individual insurance rates that "the legislature decided to phase it in," Anderson said.
The Ohio insurance department has the power to monitor rates and is required to report the results annually. If rates in the individual market rise more than 5.25 percent, then the insurance department will stop lowering rates in the open enrollment program. If the rates don't go up more than 5.25 percent, then the department can drop the open enrollment premiums even more.
Eventually, the price consumers with pre-existing conditions will pay to be in the open enrollment program could be low enough to allow an estimated 52,000 people to gain coverage, Anderson said.
"It is up to the department to analyze," McGivern said. "Folks will be watching."
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