"The Taft Patient Protection Plan"

By Bob Taft

Addressing the concerns of Ohio Families that too many HMOs have put profits before patients, Taft offers his plan to reform managed care and help make insurance more affordable for Ohio families.

-- Secretary of State Bob Taft-

Families are rightfully concerned about health care. While the managed care industry has been successful in controlling the once spiraling cost of medical care, too many patients have been denied access to care that they need. There has become too much emphasis on "managed" and not enough on "care,"

Not long ago, a patient could see their family doctor and pay their bill directly, with minimal paperwork. Today, an encounter with the health care system too often leads to headaches and hassles, and more unfortunately, to denials of physician recommended care.

It's time to refocus the health care system in favor of patients, families, and consumers. Today, I am unveiling the first of a multi-part plan to improve accessibility, quality, and cost of our health care system. Part one of the Taft Patient Protection Plan outlines a number of reforms needed in the managed care industry. Those reforms include:

1. Expand "Fast Track" Health Insurance Appeals Process. With patients increasingly concerned that they will be denied medical treatment by their health plan, we must clarify in law that patients have a right to a timely and independent appeals process when treatment is denied. The Taft Patient Protection Plan will revise health insurance statutes to clearly specify that customers have a legal right to appeal insurance coverage decisions and that appeal must include a timely response from a physician. The Taft Plan calls for the creation of a two-tiered appeals process. The standard track would require a 14-day turnaround for all cases that were not considered life threatening. A faster track response system should be created for life threatening cases. A 72-hour fast track appeals process will become law on October 1 , but only for terminal cases. This fast track appeals process should be expanded to include all life threatening cases. Life threatening should be defined statutorily and in relevant state rules.

3. Expand Direct Patient Access to Essential Services. The Taft Patient Protection Plan will guarantee direct access to needed health services without getting pre-approval from health insurers. Specifically, Ohio law will be changed to provide:

4. Create Legal Liability for Health Insurers. The Taft Patient Protection Plan will make Ohio health insurers liable for damages to a patient that resulted from the insurer's failure to exercise ordinary care when making medical decisions. This reform will allow for tort action but will not be expanded to create liability on the part of an employer who purchases coverage on behalf of its employee.

5. Require Insurance Company Medical Director to be Licensed Physician. The Taft Plan will require health insurance company medical directors to be licensed to practice medicine in the State of Ohio. This requirement is currently an Ohio Department of Insurance policy, but it is not in law as it should be. This statutory change is consistent with the liability that both doctors and health insurers should and will bear under this proposed chance in Ohio law.

6. Require Health Insurers to Provide Out-of-Network Options. The Taft Plan will require all state regulated health insurers operating in Ohio to offer health insurance policies that allow for out-of-network physician find specialist alternatives for clients who request them and are willing to pay cost-based charges for this privilege as part of their original health insurance policy.

7. Strengthen Financial Integrity of Health Insurers. Increase financial standards for health insurance companies thereby helping to assure a strong and stable insurance market and high quality health services. The Taft Plan calls for strengthening the health insurance industry by increasing financial requirements for entry into business. Currently, an insurer needs reserve funds of $1.5 million or just $1 million for a provider-sponsored entity to enter the health insurance market. This requirement should be increased to $5 million over a five year period. While this policy will have little effect on most Ohio insurers because they are financially stable, it will nevertheless reduce the possibility of weak, under-financed insurers operating in Ohio.

Conclusion

By enacting reforms such as those outlined above and other reforms to be announced in future parts of the Taft Patient Protection Plan, health care consumers can be assured that patients and care will take precedence over profit.

-- Secretary of State Bob Taft, July 23, 1998

1. Ohio Uninsured Tax Deduction. Ohioans who do not receive health insurance through an employer-sponsored plan or who are not self-employed often find it too expensive to purchase health insurance on their own. More than 400,000 working Ohioans are not covered by an employer-sponsored plan, are not self-employed, or earn too much to be eligible for Medicaid. The Taft Plan will increase access to health insurance by:

2. Ohio Medical Expenses Tax Deduction. The Taft Plan will offer financial relief to Ohio families who face significant medical expenses. Under current federal law, out-of- pocket medical expenses which exceed 7.5 percent of a person's adjusted gross income are tax deductible. There is no similar provision in Ohio law. With managed care companies limiting the type of medical procedures covered, the high cost of long-term care, and the increasing cost of prescription medicine and other medical supplies, health care consumers are forced to pay more out-of-pocket expenses than ever before. The Taft Plan will ease the financial burden of high medical bills by phasing in full state income tax deductibility for medical expenses which exceed 7.5 percent of a person's income.

3. Long-term Care Insurance Tax Deduction. With the rising cost of nursing home care and other long-term care support services, and the strain it places on family budgets, as well as on state and federal budgets, it is sound public policy to promote the purchase of long-term care insurance. Currently, nursing home insurance is not purchased by many consumers because of its high cost and in some cases, because there are legally sanctioned ways to shield assets so that they do not need to be used to pay for nursing home care. To increase the number of long-term care insurance policies, eleven states, including California and New York, offer tax incentives for the purchase of long-term care insurance. The Taft Patient Protection Plan will promote private long-term care insurance by:

Conclusion

By enacting the reforms outlined in the Taft Patient Protection Plan, Part One: Reforming Managed Care, Ohio health care consumers can be assured that patients will take precedence over profits. By enacting the three tax changes called for in the Part Two - Making Health Care More Affordable Through Tax Deductions, Ohio families can be assured of having access to quality heath care at an affordable price.