The insurance market in Ohio, Kentucky and Indiana reacted to new reform rules that began this fall. Employers with group plans were forced to decide whether or not to pursue grandfather status with their health plans, delaying the onset of the mandates but relinquishing the ability to make any substantial changes in benefits.Medical Mutual of Ohio tried to offer an acceptable alternative with its Step Plans, which feature deductibles that increase just enough each year to stay under the mandated limits for grandfathering but still show employers some cost savings. Reform's ban on exclusions for children with pre-existing conditions caused Humana, Aetna and UnitedHealthcare to drop their child-only policies. Reform's promise of enormous increases in Medicaid on the horizon had insurers positioning themselves to handle this market. Insurers such as UnitedHealth are making a case for more managed Medicaid as a cost-saver for states. In addition, reform's emphasis on accountable care organizations caused an upsurge in ACOs in the region and promises more for the future.