Ohio Health Insurance Many Sides to a Complex Issue

June has been a busy month for hawks watching the Ohio health insurance scene.

The latest development is that a federal appeals court in Ohio has upheld the 2010 health reform law. On June 29, the three-judge panel of the 6th U.S. Circuit of Appeals in Cincinnati voted 2-1 that Congress does not exceed its powers by requiring individuals to buy health insurance.

“As long as Congress does not exceed the established limits of its Commerce Power, there is no constitutional impediment to enacting legislation that could be characterized as regulating inactivity," reads the ruling of the court made up of judges appointed by both Republican and Democratic presidents.

The hope is that the Supreme Court too would ultimately reach the same decision.

The voice of dissent was that of Judge James Graham. "If the exercise of power is allowed and the mandate upheld, it is difficult to see what the limits on Congress's Commerce Clause authority would be," he wrote. "What aspect of human activity would escape federal power?

One of the most talked about developments during the month of June was the McKinskey Quarterly report which concluded that health care reform would cause 30 per cent of employers to stop offering health insurance after 2014. The White House was quick to defend its position and find holes in the story. Proponents pointed out that the survey covered only top corporate employers.

Nancy-Ann DeParle, Deputy Chief of Staff and assistant to the president comments in the White House blog, “Unfortunately, the [McKinsey] study misses some key points and doesn’t provide the complete picture about how the Affordable Care Act will strengthen the health care system and make it easier for employers to offer high quality coverage to their employees.”

The latest evidence that the White House has come out with to counter the McKinskey argument is new analyses by Avalere Consulting and the Robert Wood Johnson Foundation which says that, following health reform, the percentage of employers offering insurance to their workers will not change substantially.

Vehement criticism of the way health care reform law will impact Ohioans comes from Mary Taylor, Ohio Lt. Gov. and Insurance Director. In her guest column1 on the Ohio Department of Insurance website, she writes that the new law imposes many new mandates that are overly burdensome for most states. This includes the costly Medicaid expansion, the setting up of a new health insurance regulatory bureaucracy and market reforms that make it difficult for states to regulate health insurance.

“It is concerning that even the less controversial parts of the new law come at a great cost and burden to Ohioans and our job creators,” she says. To summarize her objections:

• The use of force to make people buy insurance
• Requiring an employer with 50 employees or more to offer health insurance coverage or pay a penalty will discourage employers from hiring more than 49 employees or even lay off workers to avoid the penalty.
• Subsidizing coverage for up to 400 percent of the federal poverty level will be funded with those penalties and fees charged to individuals and employers and by a cut of about $436 billion from Medicare, including reimbursements to Medicare providers.
• Setting up health exchange is expensive and time consuming for all states.
• Some market reforms will affect Ohio in particular. There are more than a dozen health insurance companies operating in Ohio (other states have a fewer number). For individuals and small businesses, health insurance rates are based on individual age, health status, tobacco usage and other factors. Health reform law will force Ohio “to narrow the rating requirements from many different combinations to only four”, causing insurance premiums to go up drastically for Ohioans.

References:

1Mary Taylor, President’s Healthcare Plan is Bad for Ohio and our State Insurance Market, Guest Column: STATE OF OHIO, DEPARTMENT OF INSURANCE, COMMUNICATIONS OFFICE, June 24, 2011