State reforms to individual insurance market take effect

State reforms to the individual insurance market that cap the cost of policies for people with pre-existing conditions went into effect with the start of the new year(Source: “Ohio caps health-coverage cost,” Columbus Dispatch, Jan. 4, 2010).

The new regulations require insuraners to charge no more than twice the lowest rate the company charges a person of similar age and gender.

The cap will be reduces to 1 ½ times the lowest rate by 2013. According to the Ohio Department of Insurance, the cap should reduce premiums by 50 percent to 70 percent for people who buy individual policies, and should make coverage more affordable for 52,000 uninsured Ohioans.

And in the first week in which the cap has been in place, one insurer has already been suspended for violating the law (Source: “Insurer suspended under new rate cap,” Business First of Columbus, Jan. 6, 2010).

ODI officials announced this week that Texas-based Chesapeake Life Insurance Co. has been suspended from soliciting business or selling new or renewal health or life policies in Ohio. The company was the only one of more than two dozen companies selling individual policies in Ohio that did not meet the Jan. 1 deadline to submit forms to ODI describing the plans offered and their premiums.