House Finance Committee hears Budget testimony

Last week, the House Finance & Appropriations Committee heard testimony from Pari Sabety, Director of the Office of Budget & Management who provided an overview of the budget.  Hearings had been delayed until the federal stimulus legislation was enacted so that the Strickland Administration could make last minute changes to the budget before the actual language was released.  The budget language is now available online at http://www.legislature.state.oh.us/bills.cfm?ID=128_HB_1.

Also testifying on the budget was Douglas Lumpkin, Director of the Ohio Department of Job & Family Services and John Corlett, Director of the Office of Medicaid.  Many of the questions by legislators to Mr. Corlett focused on how the hospital, nursing home, ICF/MR and Medicaid managed care fees would leverage federal Medicaid dollars and whether the entities being taxed would be made whole.  This week the various subcommittees of the Finance Committee will start hearings concerning the budgets of the various departments and agencies throughout state government.

 

A further look at Budget provision to cover High Risk Individuals 

OAHU has previously reported that one of the provisions in Governor Strickland’s proposed budget would revise Ohio’s current Federally eligible and non-Federally eligible open enrollment programs.  While using the current open enrollment structure, each insurer would be required to cap their rates at 150% of their base rate for a person with similar case characteristics.  Each insurer would have to accept high risk enrollees until they reach 4.5% of their total individual market enrollment.  The modeling done by the state’s actuary, Lewis & Ellis, concludes that insurers would increase rates by 5.5% in the regular individual market to essentially “fund” the losses they incur as a result of the 150% rate cap for high risk individuals.  Lewis & Ellis projects that 52,000 more Ohioans would purchase insurance if this proposal is implemented.

The analysis determines that the average individual market rate would be $317/month and the average open enrollment rate would be $285/month.  The modeling assumes that policies sold in the open enrollment program would provide 40% less benefits than policies sold in the regular individual market because only the current basic and standard plans would be offered in the open enrollment program.  OAHU has been meeting and talking with ODI, legislators, and insurers to understand whether this proposal can really work without significantly hurting the regular individual market and we continue to mention a high risk pool as a possible alternative.  We will keep you informed as this issue unfolds.

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