Promising New Legislation � Part I

House and Senate Bills 5 may blow some much-needed fresh air into the Ohio small group market. Among the proposed changes:

- New �Flexible Health Benefit Plans� would be created for small business employers

- Availability of health savings accounts (HSA) would be increased by encouraging more HMO participation

- Would allow HSA products to be reinsured through a state operated reinsurance program

- Health care providers would be required to provide consumers advanced notice of health care services costs

- Proposes an analysis of a high-risk pool as a health insurance option for uninsured Ohioans, and further analysis of how to increase participation in small employer purchasing alliances.

This post will examine the first three items on that list. I�ll cover the other two in a separate post.

I do see the overall plan as a welcome change from �business as usual.� The first two items merge well with the drive toward more consumer driven health care. The Flex Health plans envision a major reduction in the number and scope of mandated coverages. It�s been estimated that as much as 17% of the cost of health insurance is due to government-mandated benefits, often ones that most people don�t even want.

I seriously doubt that we�d see a substantial growth in the actual purchase of HSA plans due to increased marketing by HMO�s. Let�s face it, MSA�s/HSA�s have been available for a long time now, and it�s not availability that has limited their expansion in the marketplace. It�s the fundamentally flawed pricing model.

I�ll reserve judgment on the efficacy (and, indeed, the necessity) of reinsuring HSA�s. As noted above, it�s not availability that has limited their growth in the marketplace.

To be continued�