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Insurance can be affordable for healthy Ohioans with decent jobs, but illnesses and pre-existing conditions change everything
By Tracy Wheeler
Beacon Journal medical writer
Published on Tuesday, Jun 24, 2008
Once a year, health insurers in Ohio are required, by law, to offer coverage to anyone — healthy or ill, young or old — who applies.
So why, then, are 1.4 million Ohioans — about one in eight — still uninsured?
Because the law requires a one-month ''open'' enrollment period, not an ''affordable'' enrollment period.
Consider this offer, carried in recent newspaper advertisements throughout the state: 40- to 49-year-olds could buy an individual policy for $20,552.76 a year. If they needed a family policy, the price tag reached a stunning $55,492.44 for a year.
''The ad complies with the legal requirements for open enrollment,'' said Doug Anderson, the Ohio Department of Insurance's chief policy officer. ''But absolutely nobody is going to pay $55,000 a year for coverage.
''I would say the company that quoted those rates isn't interested in open enrollment. $112,000 a year [for a family policy] for someone over 60? Is that company trying to get anybody to buy that policy, do you think?''
Not likely.
Here's why: Those who most need open enrollment are the least desirable for insurers to cover. People with chronic conditions like diabetes or asthma. People who have had heart attacks or cancer. People like Kevin Koelliker, 53, of Brunswick, who had a heart attack in 1996, and whose wife, Ruth, 50, was diagnosed with lupus in 1992.
After his heart attack, he left his high-stress job at a Fortune 500 company. He bought COBRA coverage at $690 a month to bridge the gap between his employer-sponsored insurance and whatever he could find on the open market.
The quotes started to come in at $1,800 and $2,000 a month, though he eventually found coverage for $1,300.
''I expect to pay for my coverage, but not $1,300 per month,'' he said.
''My health-care premium is more than my house payment.''
A study by the Kaiser Family Foundation found that the average Ohio worker paid between $3,254 (for an individual plan) to $8,442 (for a family plan) in 2007.
''So why am I paying $15,600?'' Koelliker asked incredulously.
Three reasons: his heart attack, his wife's lupus and his decision to change jobs.
''Why am I being penalized for what happened 12 years ago?'' he said, referring to his heart attack. ''That's discrimination at its finest. If you saw me now, you'd never know I had a heart attack. They treat me like I have leprosy, and my wife, too.''
The Koellikers are hardly unusual.
More than half — 56 percent — of Ohioans have a chronic health condition. For those who were fortunate enough to get insurance coverage before their condition arose, they're relatively safe. Their conditions are covered. And, by law, their coverage can't be canceled because of the illnesses.
However, if those who have a chronic condition allowed their insurance to lapse longer than 62 days, they're in trouble.
''If you are healthy in the state of Ohio and you have a pretty decent job, health-care coverage is affordable,'' said State Rep. Jim Raussen, R-Springdale, chairman of the Ohio House's Health Care Access and Affordability Committee. ''Where do we get in trouble? Chronic illnesses and pre-existing conditions.''
As Anderson put it, ''In Ohio, if you have ever been treated for a health condition, you can be denied — and often are denied — coverage.''
Beware of lapses
Navigating the rules and regulations of health insurance coverage can be very confusing.
One wrong move can mean the difference between having the peace of mind of affordable insurance and the fear of losing it all by being uninsured.
It's a fear that's very real, as medical problems contribute to half of all personal bankruptcies, according to a 2005 Harvard Medical School study published in Health Affairs.
These people were primarily middle class, the study said, and 42 percent more likely than other bankruptcy filers to experience lapses in coverage.
''Solidly middle-class Americans still face impoverishment following a serious illness,'' the researchers wrote. ''(E)ven brief lapses in insurance coverage may be ruinous . . . ''
All it takes is a 62-day gap.
On the 63rd day without health coverage, insurers can legally deny coverage based on your health history, or offer rates that reach $55,000 a year and up.
For someone who has lost their job, it presents a classic Catch-22: You can buy individual insurance or COBRA — both of which is guaranteed to be more expensive than what you've been paying for insurance while working — but now you don't have the money because you don't have a job.
Yet, buying neither could be even worse, especially for someone with a chronic illness.
''If you're healthy, you could find affordable coverage on the individual market,'' Anderson said. ''But if you have health conditions, it can be very expensive and unaffordable for people who have been laid off.''
Switching jobs
The 62-day gap can also catch people changing jobs by choice, because some new jobs don't begin to offer health benefits until the new employee has worked at the company for 90 days. Again, any lapse over 62 days opens a person up to reduced coverage. In this case, if the new employer has a large group-health plan, the new employee has to receive coverage; however, coverage of the pre-existing condition can be excluded up to one year, depending on the plan.
In other words, a diabetic may get coverage for everything but diabetes-related expenses, which could mean no coverage for diabetes-related doctors visits, medications, or even surgery.
For those changing jobs, Anderson suggests short-term individual coverage or COBRA. (COBRA allows a worker to maintain coverage for 18 months, though the worker has to pay the full cost, including the employer's contribution, plus administrative fees.)
Obviously, Koelliker said, this is no longer just an issue for the poor.
''I make six figures. I'm a businessman. I have my own small [electrical] consulting business. It's ridiculous,'' he said. ''It's migrated up to the middle class. It's just now being experienced by them. It's going to get really, really ugly here.''
Of the 1.4 million uninsured Ohioans, between 28,000 and 42,000 — 2 percent to 3 percent — are uninsured because they are between jobs.
Possible solutions
The state's Healthcare Coverage Reform Initiative, a state task force gathered by Gov. Ted Strickland, is close to releasing recommendations, Anderson said.
The provisions are expected to include: mandating that insurers offer affordable coverage to everyone, regardless of medical history; extending COBRA benefits; helping small businesses provide coverage to their employees; and mandating that all Ohioans, including 19- to 29-year-olds, have coverage.
Young adults, 19- to 29-year-olds, have a reputation of choosing to go without insurance, Anderson and Raussen said.
They have the highest uninsured rate — about one in three — of any age group. However, the nonprofit National Institute for Health Care Management Foundation argues that it's not a choice for these young adults.
After aging out of their parents' coverage, they often take entry-level jobs that don't offer insurance, the foundation said. Or if the jobs do offer insurance, the cost is higher than what a young adult would normally pay, because they become part of a group that includes older and sicker workers.
Young opt out
Still, Anderson and Raussen say, there are plenty of young adults who don't buy insurance because they're young, healthy, see no need for it and don't want to add another expense — even $80 or $90 a month for an individual plan — to their rent, college loans and car payment.
They're living dangerously, though.
''I would be very careful about that,'' Raussen said. ''There's risk out there you can't see.''
Car accidents, weekend sports injuries, infections, illness. Twenty-somethings aren't immune to any of that. And treatment for any of those things can become very expensive very quickly.
Twenty-somethings have a few options, though. They can buy an individual policy, often for less than $100 a month. If they're leaving their parents' plan, they can apply for COBRA coverage if their parents' company had more than 20 employees. That would allow them to continue the same policy, usually for 36 months.
For young adults with pre-existing conditions, this may be the safest and most affordable option, the foundation said. If eligible, a person can't be turned down or charged more due to health conditions.
Those who are choosing to be uninsured may not have a choice much longer, though, if the state task force recommendations are followed, mandating coverage for 19- to 29-year-olds.
''The young tend to stay out of the market until they need it,'' Anderson said. ''You need something to get young and healthy people into the pool.''
Mandating insurance for young adults could then lead to guaranteed affordable coverage for everyone, Anderson said, because a larger pool of young, healthy enrollees could offset the cost of offering insurance to people with chronic conditions.
''You can't just lower rates for the high-risk and not have someone else pick up the slack. Doing that will raise rates for younger, healthier people,'' Anderson said. ''It's still going to be expensive, no doubt about that, but much more affordable than it is today.''
Falling through gaps
Sometimes, though, even when you've done everything right, things still don't work out as you might hope.
Koelliker, for example, paid into the system for years. He was covered when he had his heart attack. And he never let his coverage lapse, buying COBRA when he left his job, then replacing the COBRA with small-group insurance through his own business.
Still, his premiums more than doubled. Was it because he had a heart attack in 1996? Partly. But the reality is, the main mark against him was that he changed jobs — a decision that opened up his medical history to future insurers.
Had he gone from his former employer's group-health plan to COBRA, then to another employer with a group-health plan, he would have been offered the coverage and cost offered to everyone else whose part of that group, regardless of his health history.
That, too, is easier said than done though. Increasingly, employers are getting away from offering health benefits. A report by the Robert Wood Johnson Foundation found that more than 8,000 Ohio companies stopped providing health coverage between 2001 and 2005, affecting more than 515,000 workers.
The whole setup disgusts Koelliker.
''The average guy,'' he said, ''doesn't stand a chance.''
Tracy Wheeler can be reached at 330-996-3721 or tawheeler@thebeaconjournal.com.
Once a year, health insurers in Ohio are required, by law, to offer coverage to anyone — healthy or ill, young or old — who applies.
Get the full article here.
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