High Risk Pool

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OAHU Applauds High Risk Pool Study Released by the ODI
Study indicates an Ohio high risk pool is not only needed
but would be financially stable

COLUMBUS, OH (July 18, 2005)—The Ohio Association of Health
Underwriters (OAHU) announced today 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
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 precludes 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 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 over 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.”

Nationally known 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.”  

About Ohio Association of Health Underwriters
The Ohio Association of Health Underwriters (OAHU) is a trade association
representing agents, brokers and other professionals concerned with health
insurance. The association works for reform to provide an improved,
accessible and affordable health insurance system for all Ohio consumers. In
addition, OAHU supports its four local associations in promoting free-market
delivery of health care insurance and the value of the professional agent.


Editor’s Note:
-- The complete report can be downloaded from the ODI Web site home page
under the “Featured Links” section: www.ohioinsurance.gov/
-- Interviews can be arranged with OAHU representatives.
-- Interviews can be arranged with people who could be helped by the
establishment of a High Risk Pool.