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Taylor Tells U.S. Senate Panel Health Insurance Exchanges Need More Competition, Less Stringent Regulation

      Ohio's health insurance exchange under the Affordable Care Act is struggling with instability due to a lack of competition spurred by burdensome regulations, Lt. Gov. Mary Taylor told a U.S. Senate committee Sept.15 in Washington.

Lt. Gov. Taylor and director of the Ohio Department of Insurance, testified before the Senate Committee on Homeland Security and Governmental Affairs alongside insurance commissioners from three other states. The hearing focused on concerns with the ongoing instability of prices and carriers for plans on the health insurance exchanges.

This year, Ohio has 17 carriers offering plans on the insurance exchange, Lt. Gov. Taylor testified. Next year, that number is expected to fall to 11. In 19 Ohio counties, participants will have just one choice in the exchange. The average premium is also up 91% from what it was in 2013, she said.

Carriers such as Aetna are pulling out, she said, because the exchanges are too costly for them and they aren't able to innovate in order to draw costs down and provide care more in line with what consumers want.

"We need to increase access by reducing costs, instead of forcing everybody to buy more expensive coverage that in most cases they don't need and don't want," she said.

Lt. Gov. Taylor said she believed the market won't stabilize soon if more concerns aren't dealt with. The continued turmoil in the market will mean more rising premiums and more carriers dropping out of the exchanges.

"That creates a lot of chaos, and where there's chaos it's hard to price products," she said.

The rising premiums aren't just being driven by the regulations of the Affordable Care Act. The law did little to address the rising costs within the health care industry, she said.

The committee's ranking Democrat, Sen. Tom Carper of Delaware, asked Lt. Gov. Taylor and the other panelists for ideas to enhance competition in the system. She suggested less regulation of what the plans can offer.

"Let individual providers write the kind of insurance that consumers want to purchase," she said.

A major issue, she said, was that states have little control over how the exchanges are run, and few opportunities to drive innovation. Ohio chose not to run its own exchange, she said in prepared testimony, because it would have cost the state more without adding flexibility.

Sen. Rob Portman (R-Terrace Park) said the Affordable Care Act has not improved coverage for many Ohioans.

"It's not just this theoretical issue that's a debate about health care policy," he said. "It's about people's lives and their families and their ability to get coverage."

It isn't just the rising cost of premiums that concerned Sen. Portman. Deductibles are rising also, meaning Ohioans are paying high premiums and paying more out-of-pocket.

"We've got to figure out how to deal with this issue of not just the cost but the quality of care," he said. "Competition's going to help with that too."

Staying in the exchanges is costing many insurance companies money - Aetna reported $430 million in losses since January 2014 when it announced was pulling out of exchanges in many states. 

Sen. Portman said those costs are being passed along to consumers of plans not on the exchanges.

"If you are a person in an exchange plan, the bad news is your costs are going up dramatically. If you are being subsidized by that, there's others who are paying that," he said. "If you are in an employer-based plan, you're seeing an increase in yours as well because these companies aren't going out of business."

Sen. Portman also touted legislation he and other Senate Republicans recently introduced that would, for a year, allow people with subsidies on the exchange to use those subsidies to buy off-exchange plans.

"Let's let people at least be able to go outside of the network here to get insurance," he said.

Lt. Gov. Taylor said it's important to make sure consumers have options.

"The more choice we can give consumers, the better," she said.

More than 212,000 Ohioans received insurance through the exchange as of the end of March, according to the federal Centers for Medicare and Medicaid Services. That number was up from nearly 189,000 a year earlier.

Overall, the U.S. Census Bureau estimated the number of Ohioans without insurance has fallen from 1.26 million in 2013 to 746,000 in 2015, or from 11% in 2013 to 6.5%. 

More than 676,000 Ohioans were covered under Medicaid expansion last fiscal year, according to caseload reports from the Department of Medicaid.