OAHU Applauds Department of Insurance’s High Risk Pool Study

The Ohio Association of Health Underwriters (OAHU) announced that efforts to establish a High Risk Pool in Ohio have been supported by a study recently released by the Ohio Department of Insurance (ODI).

A High Risk Pool bill was initially introduced in the Senate during the fall of 2003 by Sen. Lynn Wachtmann (R-Napoleon). The bill was referred to a committee in the Ohio Senate and subsequently resulted in ODI engaging Leif Associates Inc., a health care actuarial firm, to conduct a study to determine whether a qualified high risk pool is an appropriate mechanism for providing health coverage to federally eligible individuals and uninsured Ohioans with serious medical conditions.

An Ohio high risk pool would offer comprehensive health insurance benefits to individuals with pre-existing health problems, which preclude them from most health insurance coverage. An estimated 17,250 Ohioans will access the high risk pool in order to obtain health insurance coverage. This approach to covering uninsured and uninsurable individuals has reportedly been adopted in one form or another by more than 30 states. OAHU has been a strong voice for such a program since first supporting the introduction of the legislation in 2003.

“This study underscores what OAHU has known all along about the feasibility of a high risk pool for Ohio,” said Denny Recker, the OAHU spokesperson on high risk pools. “A high risk pool has the ability to provide coverage for over 17,000 uninsured or uninsurable Ohioans who would buy insurance if they could. This high risk pool will be a tremendous asset to its targeted population. It will help those who, through no fault of their own, find themselves uninsured or uninsurable. This is a huge step in the right direction in helping reduce the number of uninsured in Ohio by helping those Ohioans who are uninsured and uninsurable acquire health care.”

“The study provides us with the data and background information needed to begin serious deliberation relating to the establishment of an Ohio high risk pool for those who are uninsured or uninsurable,” said Sen. Wachtmann, the original sponsor of the bill. “I commend the Ohio Department of Insurance for commissioning the study and call upon all interested parties to provide input into the legislative process.”

According to the study, historically, no high risk pools have gone insolvent, largely because of adequate oversight.

“What keeps these high risk pools financially stable and affordable for those insured by it is an outside funding source that subsidizes the premiums paid by the participants. In other states, this subsidy is generally levied on the insurance industry or on hospital services,” said Recker. “In the original high risk pool bill, OAHU suggested that the funding source be an assessment on each health insurance certificate issued in the state of Ohio. This would create an insurance industry solution to an insurance industry problem. We still believe that this should be the basis of the additional funding needed for the high risk pool. However, we are more than willing to look at other, broad-based funding sources including those that are discussed in the study.”

If Ohio implements a high risk pool, the state would join more than 30 others states that have established high risk pools. According to Recker, “These states have seen the stability of their insurance markets increased dramatically by having a high risk pool for those needing this type of health insurance coverage. We think a high risk pool would help Ohio maintain a stable insurance market while providing citizens with a viable alternative to the current fragmented options offered by Ohio’s safety net programs.”

High Risk Pool expert Bruce Abbe, vice president of public affairs with the rural organization Communicating for Agriculture, and member of the national state risk pool organization’s board of directors, said that today state health insurance risk pools are proven programs that, for more than 25 years, have worked to enable people with high-risk health conditions to get the comprehensive individual coverage they need.

“If they’re set up properly, the cost of coverage – while higher than standard – is still reasonable for the individuals, and broad-based risk spreading makes the additional cost of operation not excessive for the state or the insurance industry,” said Abbe. “A high risk pool in Ohio would guarantee that everyone would always be able to purchase insurance coverage. That, in turn, will help reduce uncompensated care for health care providers. State risk pools have been shown to help keep insurance markets more competitive, and provide a better means of managing and spreading the risks in the more fragile individual market, therefore making the entire system more stable.”