Please Note: You are viewing the non-styled version of Ohio.gov. Either your browser does not support Cascading Style Sheets (CSS) or it is disabled. We suggest upgrading your browser to the latest version of your favorite Internet browser.

Health Care Coverage and Quality Council | Health IT | State Coverage and Quality Ititiative | Health Care Glossary

Health Care Reform Initiative State Coverage and Quality Initiative

State Coverage and Quality Initiative – Access to Affordable Health Care

While Medicaid provides accessible health care to more than two million Ohioans based on income or disability, many others do not qualify for the program and thus continue to lack access to affordable health coverage. To address this problem, Ohio participated in the Robert Wood Johnson Foundation’s State Coverage Initiative (SCI). As part of SCI, the Governor appointed a bipartisan team, which worked closely with a broad-based coalition of stakeholders, to develop strategies to expand coverage to more Ohioans and make coverage more affordable. After a year-long process of uncovering the facts, analyzing the coverage system, and modeling proposed reforms, the SCI team reached consensus on a set of recommendations contained in a report to the Governor dated July, 2008.

The SCI team’s recommendations are a comprehensive approach to covering Ohio’s uninsured residents. Many of the recommendations require a level of funding that is not available in this budgetary environment; nonetheless, a number of the recommendations can be implemented now and begin to cover more Ohioans in these challenging economic times.

Ohio is also participating in the Commonwealth Fund’s State Quality Improvement Institute, working to implement a comprehensive set of strategies to transform Ohio’s health care system into a high quality, cost-effective, high performing system. More than 240 stakeholders have been involved in developing the Ohio Health Quality Improvement Plan which will be finalized during spring 2009.

The Executive Budget begins to implement the SCI recommendations with policy changes that will enable coverage for an estimated 110,000 additional Ohioans over time, and provides funding to assist in the implementation of the Ohio Health Quality Improvement Plan, at a total cost of $10 million in fiscal year 2010 and $16 million in fiscal year 2011 in general revenue funds.

As related to health coverage and quality initiatives, the Executive Budget contains the following provisions:

Health Care Coverage and Quality Council: The Executive Budget creates the Health Care Coverage and Quality Council, which is a quasi-public private entity to implement coverage expansion programs and an advisory committee to continue to meet to work on health system reform. The Council will have a broad-based membership representing all parts of the health care system. The Council has specific responsibilities and is funded by the Department of Insurance budget at a cost of $479,575 per year.

Transparency and Reporting Requirements for Health Insurance Rates and Loss Ratios: The SCI report recommended measures to increase administrative efficiencies to ensure that premiums paid by consumers pay for medical expenses to the greatest extent possible. The first step in implementing this recommendation is to gather the right information. Currently, insurers only report aggregate information which is not specific enough to determine whether additional regulation is advisable. The Executive Budget requires insurers to report loss ratio information to the Department of Insurance for their individual market and small group business.

Uninsured Ohioans with Health Conditions Should Have Affordable Coverage Available Through Ohio’s Open Enrollment Programs: Currently, people who are not eligible for employer-sponsored coverage or public programs must buy coverage in the individual market. People who are older and/or have health conditions can be denied coverage, issued policies with riders that exclude coverage for existing ailments, or issued coverage at extremely high premium rates. This means that older and less healthy people are in effect locked out of the individual market under current conditions and have nowhere else to go.

To address this issue, the SCI report recommended several reforms to transform the individual health insurance market. As some of these recommendations have significant budgetary implications both for the state and consumers, which are not appropriate in these economic times. Nonetheless, because “the problems with the individual market cannot be ignored,” reforms are needed to make coverage affordable for people in poor health. Ohio’s open enrollment program is intended to serve people who cannot find affordable coverage due to health conditions. Ohio’s open enrollment programs as currently constructed do not work because premiums are unaffordable for almost everyone.

The Executive Budget includes a statutory change to reduce premium rates for all open enrollment coverage to one and one-half times the lowest premium rate for new or existing business for the same or similar coverage for individuals with the same or similar case characteristics. Insurance carriers will be required to accept open enrollment applicants up to an amount equal to 4.5 percent of the insurer’s individual market business. Pre-existing conditions will be reduced by creditable coverage for all open enrollment coverage.

Based on actuarial modeling of these reforms, 52,000 more Ohioans will gain individual health coverage, and rates for open enrollment coverage will be reduced significantly. Individual market rates overall will rise on average by 5 percent. There is no fiscal impact to the state.

Require Group Policies to Offer Coverage to Dependents Up to Age 29 and Extend the State Tax Deduction for Employer Coverage to Higher Age Children and Other Dependents: In Ohio, approximately 371,000 Ohioans between the age of 19 and 29 do not have coverage. The SCI report noted that a simple, cost effective way to get young adults access to health care is to add them to their parent’s health insurance policy even in cases where the young adult is beyond the traditional age of dependency for insurance purposes. The Executive Budget implements this recommendation by requiring group policies to offer coverage to dependent children up to age 29.

The Executive Budget will concurrently make employer coverage more affordable for many Ohioans by extending the state tax deduction to employer coverage of older adult children (ages 19-29) and other dependents. Together, these two reforms will provide coverage to 21,650 uninsured Ohioans with an estimated loss of state tax revenue of $6.0 million in fiscal year 2011.

Extend State Continuation Coverage to 12 Months and Apply it to Any Job Loss: Under Federal law, employers with less than 20 employees are not required to offer COBRA coverage. The only option for these workers is state continuation coverage. The Executive Budget extends continuation coverage from 6 to 12 months, and such coverage should be available to all employees losing their job, not just those eligible for unemployment compensation.

Require Employers to Give Workers an Opportunity to Buy Health Insurance with Pre-Tax Dollars Through Section 125 Cafeteria Plans: An estimated 303,000 uninsured Ohioans are employed by companies that do not offer health insurance, or are not eligible for coverage that is offered. Providing these workers with the chance to buy coverage through a Section 125 (cafeteria) plan will allow them to use pre-tax dollars to pay their premiums. For workers at moderate income levels, this is a savings of 21 to 34 percent off the cost of coverage. For higher income workers, the savings can exceed 40 percent.

The Executive Budget requires employers to adopt Section 125 plans to allow employees to buy health coverage using pre-tax dollars. This requirement is phased in over time to allow employers, and small employers in particular, sufficient time to adopt such plans. The Ohio Health Care Cost and Quality Council will also make recommendations and take steps to help employers to understand and implement the law.

It is estimated that 37,000 more Ohioans will become insured as a result of this reform once fully implemented. There will be no fiscal impact in this biennium due to the phased implementation schedule.

Improve Regulatory Oversight of Provider Networks and Allow the Superintendent of Insurance to Order Independent Reviews of a Health Claim Denials: Under current law, regulatory oversight of health insuring corporation provider networks is divided between two state agencies: the Department of Insurance and the Department of Health. To improve efficiency and coordinate regulatory functions, the Executive Budget will consolidate all authority over provider networks to the Department of Insurance. The Executive Budget will also give the superintendent of insurance authority to order an insurer to initiate an independent review of health care claim denials without the consumer having to take any action.

Study Health Coverage Financing: In order to continue to implement the SCI recommendations, further study is needed to explore how health coverage programs can and should be financed going forward. This study will analyze Ohio’s current health care system and financing strategies that can support and sustain affordable coverage expansion programs, improve the efficiency of the health care system, and avoid negative impacts.

Implementation of the Ohio Health Quality Improvement Plan: The Executive Budget provides funding to assist with the implementation of strategies and tactics reflected in the Ohio Health Quality Improvement Plan, which will be finalized during the spring of 2009. These strategies and tactics will specifically focus on the areas of improving chronic care management, promoting health and reducing disease and injury, improving patient safety, and improving efficiency and decreasing cost in the healthcare system. More than 240 public and private stakeholders are involved in the creation of this plan.

Ohio Health Information Exchange Center: The Executive Budget provides funding to advance the implementation of health information technology, which is a key element of progress toward health care efficiency and reform. Federal recovery dollars provide an opportunity to leverage state dollars and draw down federal match. For example, an investment of $5 million for health information technology may draw down more than $50 million federal dollars. Parts of this goal will be accomplished through continued support of the Ohio Health Information Exchange Center, which is a collection of services and data that bring together the necessary information to create a comprehensive view of the individual patient, thereby improving the overall delivery of healthcare and lowering costs.