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Insurers warn Ohio bill to expand Medigap guaranteed issue and cap rates could raise premiums
Summary
Keith Lake of AHIP told the House Insurance Committee that House Bill 24’s combination of guaranteed issue for some Medicare-eligible people under 65 and a birthday-rule open enrollment could concentrate high-cost enrollees in low‑priced plans and raise premiums or cause carriers to exit the market.
Keith Lake, regional director of state affairs for America's Health Insurance Plans (AHIP), testified in opposition to House Bill 24 at the Ohio House Insurance Committee's third hearing, saying the proposal would destabilize Ohio's Medigap market and could increase premiums for seniors.
Lake told the committee that AHIP members provide coverage to roughly 9,000,000 Ohioans and that Ohio currently has "one of the most robust and competitive Medigap markets in the country" with "dozens" of carriers offering Medigap policies. He said House Bill 24 would require Medigap issuers to offer all available Medigap plans to Medicare enrollees under age 65 (including those with disabilities and end‑stage renal disease, or ESRD) and cap premiums for those enrollees at the lowest rate offered to seniors. Lake said the bill would also create an annual guaranteed‑issue open enrollment period for that population — a so‑called birthday rule.
"Requiring carriers to include these patients in the Medigap risk pool and at the same time restricting premium rates for these individuals will increase premiums," Lake testified, saying ESRD beneficiaries "incur spending that is about 6 times greater than spending for beneficiaries ages 65 and older who do not have ESRD." He also cited 2021 data from the Medicare Payment Advisory Commission (MedPAC) that average Medicare spending per beneficiary was $15,094 and argued that Medigap covers the portion Medicare does not pay. Lake said other states with similar requirements have seen fewer carriers offering Medigap policies and that premium increases tend to be concentrated in the lowest‑priced plans.
Committee members pressed Lake for quantification. Representative Jerrells asked for an estimate of how much premiums might rise; Lake replied he did not have an actuarial study to provide and pointed to the logical effect of adding a higher‑cost population to the risk pool. Representative Sweeney noted proponents had supplied a study that estimated a small per‑member increase (about $0.40 per month) in some states; Lake said he believed that study did not fully reflect all provisions of House Bill 24 and that the actual impact could be higher. Lake added that in states that enacted similar laws some carriers left the market, and AHIP members could choose to do the same in Ohio.
Lake also explained how Medigap pricing is structured: because Medigap policies are sold on a guaranteed renewable basis, issuers price policies assuming policyholders will maintain coverage long term; an annual open‑enrollment birthday rule would undermine that structure, he said, by creating adverse selection. In response to Representative Sweeney and other members who described congressional action (the 21st Century Cures Act) that expanded Medicare Advantage access for ESRD beneficiaries, Lake said he had no immediate alternative solution but was "more than open to having conversations about this bill."
The testimony concluded with the committee taking no final action; members were asked to review other opponent submissions for the record.
